Connect to share and comment

Dollar holds firm in Asia after topping 100 yen

PlacardEnlarge
(Globalpost/GlobalPost)

The dollar held firm in Asia on Wednesday after breaking the psychologically important 100 yen mark for the first time in nearly a month.

The unit changed hands at 100.66 yen in afternoon Tokyo trade, almost flat from late Tuesday in New York, where it rose past the 100 yen mark for the first time since early June.

The greenback's strength came as solid US economic data bolstered a chance that the Federal Reserve will taper its bond-buying programme, a move likely to send the dollar higher.

In other currency trading, the euro also moved narrowly, fetching $1.2971 and 130.59 yen against $1.2978 and 130.60 yen in US deals.

Investors are focussing on a string of important US economic indicators later Wednesday as well as Friday's non-farm payrolls data, said Daisaku Ueno, senior forex strategist at Mitsubishi UFJ Morgan Stanley.

"The dollar was broadly stronger on expectations of the Fed's tapering of its bond-buying programme," he said, adding that whether the currency would be able to stay above 100 yen would depend on upcoming US data.

Campaigning for Japan's July 21 upper-house elections officially kicks off Thursday.

If the ruling coalition wins a majority of seats, overseas investors could interpret the victory as voters giving a nod of approval to Prime Minister Shinzo Abe's economic policies, dubbed "Abenomics", which would be a yen-selling cue, Ueno said.

Since taking office in December, Abe has pushed for active fiscal spending while the Bank of Japan under governor Haruhiko Kuroda, handpicked by Abe, carried out massive monetary easing, sending the yen into a nosedive.

The moves sent the dollar above 103 yen before it fell back to the 94 yen mark by mid-June as investors flocked to the traditionally safe-haven currency, amid stock market turbulence.

The Australian dollar fell to 90.98 US cents from 91.69 cents Tuesday, hitting the lowest level since September 2010, after Australia's central bank gave a strong signal it may continue cutting interest rates to cushion the economy as a long mining boom slows.

"We will be able to continue to do our part, consistent with our mandate, to assist the transition in sources of demand that is needed," Glenn Stevens, governor of the Reserve Bank of Australia said in a speech Wednesday. "We will do what can reasonably be done."

The remarks came a day after the central bank resisted cutting interest rates beyond their current record low after a weakening currency has in recent weeks helped spur slower parts of the economy such as manufacturing whose competitiveness had been dented.

The dollar was also higher against other Asia-Pacific currencies on Wednesday.

The greenback rose to Sg$1.2733 from Sg$1.2671 the previous day, to Tw$30.06 from Tw$30.00 and to 43.43 Philippine pesos from 43.33 pesos.

It also gained to 60.02 Indian rupees from 59.37 rupees, to 1,142.18 South Korean won from 1,133.56 won, to 10,040 Indonesian rupiah from 9,980 rupiah and to 31.08 Thai baht from 30.97 baht.

The Chinese yuan changed hands at 16.38 yen against 16.27 yen.

-- Dow Jones Newswires contributed to this article --

bur-mis/hg/pdh

http://www.globalpost.com/dispatch/news/afp/130703/dollar-holds-firm-asia-after-topping-100-yen-0