Dollar remains boosted ahead of NFP

The number of Americans filing jobless claims last week rose to its highest level since May and stood at seasonally adjusted 320,000 for the week ended , significantly up from the previous reading of 313,000, the latest report from the U.S. Department of Labor showed on Thursday.

"The underlying fundamentals of the economy remain solid and there is no reason we won't continue to see the type of economic growth and job growth that we saw in 2014 continuing this year," said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh.

The report did not mention any specific reasons for the jump in the headline index; however, economists said that cold weather conditions in February along with strike by petroleum refinery workers contributed in the hike.

"We suspect the pattern reflects the weather rather than fundamental deterioration. That said, we will, of course, be on watch for the possibility that the rise in the last two weeks marks a change in the trend," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.

The U.S. Federal Reserve closely monitors the job market as it influences the monetary policy stance. A number of Fed officials have hinted that a hike in interest rates around midyear is possible.

U.S. Fed Chairwoman Janet Yellen told lawmakers last week "the unemployment situation in the United States has been improving on many dimensions."

The US dollar remained boosted and hovered at 11-year highs against the basket of major currencies regardless of the spike in the jobless claims. Markets now focus on the non-farm payrolls data to be released today. USD/JPY trades around 120.11 levels, after posting today's high at 120.21 and low at 119.90. A strong NFP report is likely to push the dollar upwards with 121.00 as the next bullish target.

"The dollar is following a well worn path of being bought on expectations of strong payrolls. Yellen touched on the Fed's data dependent aspect and the market has become more sensitive to indicators," said Shinichiro Kadota, chief Japan FX strategist at Barclays in Tokyo. "The payrolls figure is of course important. But wages, with a strong link to inflation that Yellen is concerned about, need watching as well."