News Column

Dollar falls to 101 yen zone in morning amid concerns over Iraq

June 15, 2014

The U.S. dollar fell to the upper 101 yen zone in Tokyo on Monday morning as escalating violence in Iraq and a decline in Tokyo shares made investors risk-averse, boosting demand for the perceived safety of the yen.

At noon, the dollar fetched 101.87-93 yen compared with 102.00-102.10 yen in New York and 101.82-83 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.3537-3540 and 137.91-98 yen against $1.3533-3543 and 138.01-11 yen in New York and $1.3574-3575 and 138.21-25 yen in Tokyo late Friday afternoon.

After gaining ground on Friday in New York, the dollar reversed the course Monday morning in Tokyo, falling into the 101 yen range amid a risk-averse mood in tandem with a decline in the euro versus the yen.

Market players were wary about escalating instability in Iraq after local media reported Sunni insurgents seized the city of Tal Afar, northern Iraq, on Sunday following deadly fighting.

"Attention had been focused on the Ukraine crisis recently but Iraq has emerged to grab everyone's attention," said Shinichiro Kadota, foreign exchange strategist at Barclays Bank.

In addition to the worsening violence in Iraq, a fall in Tokyo shares also made investors reluctant to take a risk and become attracted to the safe-haven yen, he added.

The 225-issue Nikkei Stock Average ended the morning session down 94.01 points, or 0.62 percent, from Friday at 15,003.83.

The euro edged lower to the 137 yen range, remaining sluggish after the European Central Bank eased monetary policy earlier this month and its President Mario Draghi hinted at taking further easing steps in the future if necessary, dealers said.

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Source: Japan Economic Newswire

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