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Dollar firms in Asian trade

Posted by | June 28, 2013 .

TOKYO (AFP) – The dollar firmed against the yen in Asia on Friday as US Federal Reserve officials moved to ease concerns it will bring an end to its massive stimulus programme later this year.

The greenback fetched 98.95 yen in Tokyo afternoon trade, against 98.43 yen in New York late Thursday and high-97 yen levels seen in Asia on Thursday.
”It’s risk-on yen-selling,” Kengo Suzuki, forex strategist at Mizuho Securities, told Dow Jones Newswires.

The euro also rose to 129.28 yen from 128.40 yen, while it bought $1.3063 from $1.3035.

Investors were buoyed after William Dudley, the Fed’s New York president, said the bank would not hastily end its bond-buying programme, which helps keep interest rates low.

”A rise in short-term rates is very likely to be a long way off,” he said.

He added that Fed policy rests ”on the progress we make towards our objectives” of pushing unemployment down to 6.5 percent and getting the world’s largest economy back up to strength.

The euro won support after an EU survey showed on Thursday that businesses and consumers in the 17-nation bloc turned sharply more optimistic in June about their economic prospects.

However, that was tempered by revised data showing that bailed-out eurozone member Ireland had fallen back into recession for the first time since 2009.

Forex flows were also being driven by firms locking in their month-end positions, including importers who buy dollars to pay for goods from overseas, dealers said.

Earlier Friday, Japan said industrial production rose a better-than-expected 2.0 percent in May, indicating a pick-up in the world’s third-largest economy.

But consumer prices were flat as Japan continues to wrestle with growth-crimping deflation, boosting the likelihood that the Bank of Japan will press ahead with its massive monetary easing programme, which tends to weaken the yen.

Tokyo on Friday confirmed upper-house elections will take place on July 21 as opinion polls tip Prime Minister Shinzo Abe’s party to score a big win, clearing the way for him to push through his economic reforms.

The dollar was mixed against other Asia-Pacific currencies.

It slipped to Sg$1.2648 from Sg$1.2687 Thursday, to 59.81 Indian rupees from 60.45 rupees, to 43.25 Philippine pesos from 43.31 pesos and to 9,941 Indonesian rupiah from 9,995 rupiah.

The greenback held steady at Tw$30.01 while edging up to 31.17 Thai baht from 31.11 baht.

The Australian dollar was down at 92.49 US cents from 93.12 cents while the Chinese yuan changed hands at 16.07 yen against 15.90 yen.

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