US dollar mixed in Asia trade after recent surge

The greenback bought 87.73 yen in Tokyo afternoon trade, down from 88.15 yen in New York on Friday, after earlier hitting a peak of 88.41 yen, its highest level since mid-July 2010.

The euro slipped to US$1.3034 from US$1.3067, while it was also weaker at 114.33 yen from 115.19 yen.

On Friday, the U.S. dollar notched up gains as the U.S. Labor Department said the country's unemployment rate was unchanged at 7.8 percent in December while job growth continued at a modest pace.

“The (U.S. dollar/yen) pair is making some adjustments after its sharp rise leading up to last Friday's nonfarm payrolls data,” said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.

Also, the latest ISM index on the service sector showed unexpected growth in December, the fastest in 10 months, led by new orders and employment.

A deal on the U.S. fiscal cliff averted across-the-board tax hikes and automatic spending cuts which some had feared could have tipped the world's biggest economy back into recession.

The agreement helped the U.S. dollar, although the International Monetary Fund, rating agencies and analysts warned that the critical problem of deficits and debt still hang over the U.S. economy.

Dealers said the market would turn its focus towards central banker speeches this week, after minutes from the last U.S. Federal Reserve meeting sent the U.S. dollar surging against the euro and yen.

Investors interpreted the meeting minutes as a signal that monetary easing could end sooner than expected. Policy tightening tends to support the U.S. dollar.

Markets will also be looking to the European Central Bank's monthly meeting this week for clues about future policy moves, as well as new Spanish and Italian bond auctions, dealers said.

The yen meanwhile has been under selling pressure after Japan's new Prime Minister, Shinzo Abe, vowed to push for aggressive monetary easing as he centers his first weeks in power on fixing Japan's long-suffering economy.

The U.S. dollar was mostly higher against other Asia-Pacific currencies.

It rose to SG$1.2310 from SG$1.2287 on Friday, to 9,799 Indonesian rupiah from 9,790 rupiah, to 30.46 Thai baht from 30.45 baht, to 40.92 Philippine pesos from 40.89 pesos, and to 55.00 Indian rupees from 54.85 rupees.

The Australian dollar rose to US$1.0472 from US$1.0438 while China's yuan was quoted at 14.09 yen from 14.05 yen.

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