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Dollar falls back into lower 102 yen zone on exporters' yen-buying

February 25, 2014

TOKYO, Feb. 25 -- (Kyodo) _ The U.S. dollar slipped back to the lower 102 yen zone Tuesday in Tokyo on Japanese exporters' yen-buying, after a morning of directionless trade amid a dearth of major market-moving events.

At 5 p.m., the dollar fetched 102.32-33 yen compared with 102.45-55 yen in New York and 102.28-29 yen in Tokyo at 5 p.m. Monday. It moved between 102.27 yen and 102.63 yen during the day, changing hands most frequently at 102.54 yen.

The euro was quoted at $1.3750-3751 and 140.69-73 yen against $1.3730-3740 and 140.63-73 yen in New York and $1.3737-3738 and 140.51-55 yen in Tokyo late Monday afternoon.

The yen rallied against the dollar and euro in the afternoon as Japanese exporters bought yen. "Japan's currency market experiences seasonality and at this time of year there is a lot of repatriation of funds," said Yuji Saito, director of foreign exchange at Credit Agricole Corporate & Investment Bank in Tokyo.

"Even when the Nikkei stock average is high, if U.S. Treasury bond yields are down this will hold the dollar down against the yen, and that is the case today," he said.

The dollar moved mostly in the mid-102 yen zone in the morning, almost unchanged from its levels in New York overnight in the absence of key economic data.

While traders remain sharply focused on the U.S. economy, currency markets are unlikely to move much even if U.S. economic data released later this week points to weakness, as the data are assumed to be affected by the unusually harsh weather across much of the United States in recent months, said Shinichiro Kadota, foreign exchange strategist at Barclays Bank.

Out this week are U.S. consumer confidence data later Tuesday, new home sales data on Wednesday and a Chicago area manufacturing report on Friday.

"Even if these indicators are soft, currency markets are unlikely to move dramatically because there's tolerance for the bad weather conditions," Kadota said.

February U.S. nonfarm payrolls, to be released next week, are considered a clearer benchmark of U.S. economic health, and "until they are out, it will be difficult for the market to move," he said.

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Source: Japan Economic Newswire

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