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Yen gains in Asian trade

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(Globalpost/GlobalPost)

The yen strengthened in Asia on Monday afternoon as investors locked in profits from betting on the dollar's recent surge, but the Japanese unit's decline was still on track, dealers said.

In Tokyo trade, the greenback fetched 101.04 yen, down from 101.14 yen in New York Friday and 102.33 yen in Tokyo on Friday morning.

Dollar weakness "would last only for a short time as appetite to buy the pair on dips remains strong," said a senior dealer at a major bank in Tokyo.

The dollar rose past 103 yen this month to hit its highest level since October 2008 on the Bank of Japan's aggressive monetary easing and robust US economic data. Easing tends to push down a national currency.

Dollar trade has been influenced by differing interpretations over comments from US Federal Reserve chairman Ben Bernanke last week, although dealers generally saw him as saying the Fed needed to see a few months' more data before it would weigh reining in its bond-purchase programme.

In other trade, the euro also weakened against the Japanese currency at 130.60 yen from 130.82 yen on Friday, while it bought $1.2926 from $1.2936.

Figures from Germany's official statistics office on Friday showed that gross domestic product in Europe's biggest economy posted anaemic growth of 0.1 percent from January to March, with only consumer spending in positive territory.

However, the figures meant that Germany has successfully skirted a recession following a sharp contraction of 0.7 percent in the previous quarter, as the eurozone remains mired in economic gloom.

German business confidence also rose unexpectedly in May, with the Ifo economic institute's closely watched business climate index rising to 105.7 points in May from 104.4 points in April.

"The German Ifo improved more than expected in May suggesting that the economy will grow at a more measurable pace than the limp 0.1 percent Q1 performance," National Australia Bank said in a note.

"In the US, durable goods orders also pointed to US business investment spending building more momentum through mid-year."

The dollar was mixed against other Asia-Pacific currencies.

It slipped to Sg$1.2645 from Sg$1.2647 the previous day, to 9,798 Indonesian rupiah from 9,800 rupiah, and to 1,123.38 South Korean won from 1,126.90 won and to 29.91 Thai baht from 29.94 baht.

The greenback firmed to 41.63 Philippine pesos from 41.60 pesos and to 55.69 Indian rupees from 55.55 rupees, while it was flat at Tw$29.87

The Australian dollar firmed to 97.24 US cents from 96.68 cents while the Chinese yuan changed hands at 16.47 yen against 16.58 yen.

bur-kh/pb/mtp

http://www.globalpost.com/dispatch/news/afp/130527/yen-gains-asian-trade-0