TOKYO: The dollar retreated in Asia on Monday after rallying at the end of last week as a robust US jobs report fuelled speculation the Federal Reserve would bring forward its timetable to raising interest rates.
The greenback bought 118.84 yen in Tokyo morning trade, slightly down from 119.00 yen in New York Friday afternoon but still sharply up from 117.33 yen in Tokyo earlier Friday.
The euro bought $1.1320 compared with $1.1316 in US trade and 134.56 yen against 134.65 yen.
On Friday the US Labor Department said the world's largest economy added a better-than-expected 257,000 jobs in January and revised upward already healthy growth in the prior two months. The gains were the best over three months since 1997.
Investors poured into the dollar on expectations the Fed will hike interest rates around the summer as it tries to prevent bubbles from developing in the US economy, which is on a strong recovery track.
"If employment data remain strong, it is highly possible that rates will be raised by mid-year even if pay rises are small," Junichi Makino, chief economist at SMBC Nikko Securities, said in a note.
If the Fed raises rates by 1.0 percentage point annually, the dollar could rise to 125 yen by the end of the year, he said, adding that it could hit 131 yen if the Bank of Japan eases monetary policy further.
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