- The dollar dropped below the 103 level against the yen on Monday, driven lower by expectations that Friday’s unexpectedly weak U.S. jobs report for December will prompt the Federal Reserve to maintain loose monetary policy for longer.

USD/JPY fell to lows of 102.97, the weakest since December 18 and was last down 0.90% to 103.22.

The pair was likely to find support at 102.55, the low of December 18 and resistance at 104.12.

The drop in the dollar came after Friday’s nonfarm payrolls report showed that the U.S. economy added 74,000 jobs in December, the smallest increase since January 2011 and well below expectations for 196,000 new jobs.

The unemployment rate fell to a five year low of 6.7% from 7% in November, but this was due in part to people dropping out of the labor force.

The report raised concerns that the Fed will adopt a more cautious approach to scaling back its stimulus program, after cutting it by USD10 billion in December, reducing it to USD75 billion-a-month.

The dollar edged higher against the euro, but gains were limited. EUR/USD fell to lows of 1.3636 and was last down 0.10% to 1.3654, holding just below Friday’s one-week high of 1.3686.

Elsewhere, the euro was sharply lower against the yen, with EUR/JPY dropping 1.01% to 140.95.

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