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Yen edges up against dollar after heavy sell-off

AFP FILE PHOTO

TOKYO – The yen took a breather in its rapid fall to near four-year lows in Asia on Tuesday, pausing the downward trajectory it began when the Bank of Japan announced aggressive monetary easing last week.

The dollar, which rose to around 99.65 yen early in the morning to hit its highest level since May 2009, was changing hands at 99.25 yen in afternoon trade, against 99.36 yen in New York Monday.

The dollar’s rise stalled owing to profit-taking cued by Japanese Finance Minister Aso’s comments Tuesday that the yen’s excessive strength was being corrected, as well as on dollar selling by exporters, market players said.

The euro rose to 129.52 yen from 129.23 yen in US trade. The European common currency also rose to $1.3049 from $1.3005.

The safe-haven yen hit its postwar high of 75.32 against the dollar in late 2011.

But it took a plunge in December as new Prime Minister Shinzo Abe promised active public spending and called for aggressive easing by the Bank of Japan (BoJ).

The yen has tumbled further since last week when the bank announced sweeping stimulus measures under new governor Haruhiko Kuroda.

Although a weak yen is good for Japanese exporters as it makes their products more competitive abroad, it also makes Japanese import bills higher.

Abe on Tuesday acknowledged the government “needs to continue watching how rises in prices of raw materials and other items are affecting companies and households”.

But “the recent currency trend is giving a positive impact to the economy as a whole”, he told a parliamentary committee.

The dollar’s upward momentum against the yen could last for at least another month, said Citibank Japan chief FX strategist Osamu Takashima, adding it looked set to rise by more than one yen in the short term.

“But by looking at the market momentum right now, it looks like markets won’t be satisfied with the dollar touching 100.80,” Takashima said.

The euro has risen against the dollar following weaker-than-expected US jobs data Friday last week, a senior dealer said.

The dollar was largely lower against most other Asia-Pacific currencies Monday.

It fell to 41.26 Philippine pesos from 41.30 pesos a on Monday, to Sg$1.2401 from Sg$1.2411, to 9,739 Indonesian rupiah from 9,761 rupiah and to 1,137.75 South Korean won from 1,138.85 won.

It also eased to 54.43 Indian rupees from 54.69 rupees and to 28.97 Thai baht from 29.32 baht but rose to Tw$30.05 from Tw$30.00.

The Australian dollar rose to $1.0429 from $1.0369 while the Chinese yuan rose to 16.00 yen from 15.86 yen.


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