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The dollar and euro fell against the yen in Asia Thursday.
Written by article default Thursday, 22 April 2010 06:02
Market OverviewThe dollar and euro fell against the yen in Asia Thursday as weak regional equities prompted Asian hedge funds and other short-term investors to sell those currencies for the safe-haven Japanese unit.
The yen also benefited from speculation that Japan's central bank is unlikely to ease monetary policy soon.
Market participants also sold the dollar and euro for the yen after a local media report said the Bank of Japan may upgrade its economic forecast at its next monetary policy meeting next Friday, dealers said.
At 0450 GMT, the dollar stood at JPY92.85 compared with JPY93.19 late Wednesday in New York. The euro traded hands at YEN124.34, down from YEN124.82.
The euro was little changed against the dollar, standing at USD1.3390 compared with USD1.3393 late Wednesday in New York. The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies including the euro, was at 81.165 compared with 81.212.
The pound, while lower against the yen, is holding fairly steady against the dollar and euro Thursday. The pound Wednesday gained after the number of U.K. jobless benefit claimants fell more than the market had anticipated. The news added to positive comments from the latest Bank of England minutes, released at the same time, suggesting that some monetary policy committee members are concerned about a recent rise in inflation, which could lead to policy tightening sooner than investors had expected.
The Australian dollar remained strong against the US dollar, aided by firm Asian stocks. The Aussie also resumed its advance against the kiwi as investors continue to favor the Aussie on the divergent interest rate outlook between the two countries.
Market expectation
The greenback and euro may fall further against the yen for the rest of the week, particularly if share markets remain sluggish, prompting market participants to trim bets on those currencies against the yen, dealers said.
European stocks are expected to open slightly lower, Thursday, with subdued trading in the U.S. and Asia offering few leads for investors. However, concerns about Greece persist and are likely to exert pressure on both stocks and the euro.
Growing concerns over Greece's debt trouble may send EURYEN to YEN123.00, from YEN124.39 last, by end of week, says analysts. After spread between Greek 10-year bonds, comparable German bonds rose to crisis high of 5.2 percentage points Wednesday.