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Dollar slips versus yen in Asian trade

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(Globalpost/GlobalPost)

The dollar weakened against the yen in Asia Tuesday after poor US housing data raised the likelihood the Federal Reserve would not wind back its stimulus programme in the near term.

The greenback fetched 99.46 yen in afternoon Tokyo trade, down from 99.59 yen in New York Monday afternoon and well off the 100-yen levels at the end of last week, while the euro bought 131.26 yen and $1.3198, from 131.33 yen and $1.3186.

On Monday the National Association of Realtors said home US sales fell 1.2 percent to an annual rate of 5.08 million in June, from a downwardly revised 5.15 million in May. The average analyst estimate was for a rise to a 5.28 million pace in June.

The news indicates the economy is still not able to support itself without the huge cash injections from the Fed's bond-buying, which could push back the bank's timing for reeling in the scheme.

In Japan the win for Prime Minister Shinzo Abe's party in upper house elections on Sunday gives him full control of both houses and the legislative muscle to press on with his drive to boost the economy.

Abe has embarked on a big-spending, stimulus-driven scheme to kickstart Japanese growth, which has seen a flood of yen hit financial markets, sending the value of the unit tumbling.

However, Credit Agricole said: "The election victory ... did not deliver the sharp move higher in (the dollar against the yen) that many were looking for."

The victory was widely expected while a drop in US bond yields in recent days may also be dragging the dollar down, it added.

"Markets will now look for long-awaited reforms from Abe, but despite the resounding election victory he will need to win over the vested interests in his party, which will be no easy task," Credit Agricole said.

The dollar was mixed against other Asia-Pacific currencies.

It firmed to 59.59 Indian rupees from 59.44 rupees Monday and to Tw$29.91 from Tw$29.90.

The greenback edged down to Sg$1.2624 from Sg$1.2625, to 30.92 Thai baht from 30.95 baht, to 43.16 Philippine pesos from 43.25 pesos and to 1,116.07 South Korean won from 1,118.25 won.

It stood at 10,205 Indonesian rupiah.

The Australian dollar rose to 92.76 US cents from 92.13 cents while the Chinese yuan changed hands at 16.20 yen against 16.26 yen.

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http://www.globalpost.com/dispatch/news/afp/130723/dollar-slips-versus-yen-asian-trade