Dollar firms after bright US, European data

AP FILE PHOTO

TOKYO – The dollar firmed against the yen in Asian trade Wednesday, lifted by promising US and European macroeconomic data, amid thin trade while investors stayed away for summer breaks.

The greenback stood at 78.81 yen, firming from 78.73 yen in New York Tuesday afternoon.

The euro was at $1.2328 and 97.14 yen, nearly flat from $1.2321 and 97.01 yen in New York.

“Risk appetite isn’t bad,” a senior trader at a major bank in Japan told Dow Jones Newswires.

The euro was seen to hover between $1.2250 and $1.2350 with bias on the downside after euro-zone GDP figures contracted in the second quarter, the bank trader said.

“It feels like the pair has topped-out,” he said.

Meanwhile, the dollar could climb above 79.00 yen, if more US data fuel optimism and if the upward trend of long-term US Treasury yields remain intact, said Masafumi Yamamoto chief forex strategist at Barclays in Tokyo.

The market will also watch for any impact from regular US Treasury coupon payments Wednesday, he told Dow Jones Newswires.

Bond-holding Japanese institutional investors may buy the yen to repatriate the coupons.

This trend has led to a popular market view that the dollar tends to weaken against the yen toward mid-August.