News Column

Dollar steadies in lower 102 yen in morning as U.S. optimism reigns

June 2, 2014

The U.S. dollar held steady in the lower 102 yen zone in Tokyo on Tuesday morning amid a lack of market-moving events during Asian trading, inheriting a sense of optimism on the U.S. economic outlook.

At noon, the dollar fetched 102.37-38 yen compared with 102.33-43 yen in New York and 101.98-102.00 yen in Tokyo at 5 p.m. Monday.

The euro was quoted at $1.3603 and 139.25-26 yen against $1.3592-3602 and 139.15-25 yen in New York and $1.3607-3609 and 138.77-81 yen in Tokyo late Monday afternoon.

The U.S. dollar hovered in the lower 102 yen range early Tuesday in Tokyo, little changed from its levels late Monday in New York.

With little stimuli in Tokyo trading time, market participants were holding off on bold trades ahead of major risk events, namely the European Central Bank's policy meeting on Thursday and the release of May U.S. nonfarm payrolls on Friday, said Toru Moritani, chief market economist at Sumitomo Mitsui Banking Corp.

The dollar had risen in New York as a decent Institute of Supply Management May purchasing managers' index of 55.4 reinforced optimism about the U.S. economy, although confusion sent the greenback down at one point, as the ISM released a mistakenly low reading before revising it, Moritani said.

"With the mood on U.S. manufacturing and employment conditions running quite high, the dollar still has room to rise against the yen ahead of jobs data on Friday, and particularly after the distraction of the ECB meeting is removed, traders will be in full-on payroll watching mode," he said.

The euro held against the dollar in Tokyo after falling further overnight as Germany's EU-harmonized consumer price data turned out weak, likely adding to pressure on the ECB to loosen monetary policy to ward off deflation, Moritani said.

"The market has been anticipating interest rate cuts and other measures for a while now and has sold the euro accordingly, so it's unlikely to fall much further ahead of the ECB meeting."

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Source: Japan Economic Newswire

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