NEW YORK, Nov 6 (Reuters) - The yen rise on Friday after a report showed the U.S. unemployment rate spiked to 10.2 percent, fueling worries about the health of the economy and boosting safe-haven demand for the Japanese currency.
The government reported U.S. employers cut a deeper-than-expected 190,000 jobs in October, driving the unemployment rate to a 26-1/2-year high. For details, see [ID:nN04495174].
The news dashed hopes the recession was ending after recent gross domestic product and jobless claims readings pointed to an economic recovery. With the labor market still weak, U.S. consumer sentiment and spending will likely remain under pressure, analysts said.
"The yen has obviously benefited ... from risk aversion," said Samarjit Shankar, managing director of global FX strategy at BNY Mellon in Boston.
"The big psychological impact was from the 10.2 percent unemployment rate. It's going to cast further doubt on whether the incipient U.S. economic recovery can be sustained without further government support," he added.
The dollar fell as low as 89.62 yen, according to Reuters data, and last traded 1 percent lower at 89.85 yen JPY=. The euro declined 1.2 percent to 133.45 yen EURJPY=R, after hitting a session low of 133.22 yen.
Analysts said the dollar also came under pressure against the yen as two-year U.S. Treasury yields eased after the jobs data. The two-year notes are most sensitive to potential changes in the Federal Reserve's monetary policy.