News Column

Dollar falls to lower 101 yen zone on intensified geopolitical risks

May 20, 2014

Satoshi Iizuka

The U.S. dollar fell to the lower 101 yen zone Tuesday in Tokyo on a renewed risk-averse mood amid geopolitical risks including the declaration of martial law by the Thai military.

At 5 p.m., the dollar fetched 101.38-40 yen compared with 101.46-56 yen in New York and 101.42-43 yen in Tokyo at 5 p.m. Monday. It moved between 101.37 yen and 101.60 yen during the day, changing hands most frequently at 101.45 yen.

The euro was quoted at $1.3695-3696 and 138.84-88 yen against $1.3705-3715 and 139.12-22 yen in New York and $1.3717-3718 and 139.12-16 yen in Tokyo late Monday afternoon.

The U.S. currency weakened in the afternoon in Tokyo under the weight of geopolitical risks, dealers said.

Thailand's military declared martial law nationwide earlier in the day, citing the need to restore and maintain order following six months of antigovernment protests.

Some market players moved to sell the dollar on the development in Thailand, which came on top of recent geopolitical risks such as those related to the Ukraine situation and the China-Vietnam standoff, dealers said.

In the afternoon, the Bank of Japan started its two-day policy meeting, though its policy board is widely expected to keep intact its monetary easing policy and basic economic assessment.

Market participants will closely watch a press conference by BOJ Governor Haruhiko Kuroda on Wednesday afternoon, said Minori Uchida, head of Tokyo global market research at the Bank of Tokyo-Mitsubishi UFJ.

But even if Kuroda fails to hint at fresh easing steps, it would not cause a major sell-off of the dollar as "expectations for further monetary stimulus by the BOJ have receded," he added.

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Source: Japan Economic Newswire