News Column

Dollar falls to mid-101 yen in morning on disappointing U.S. data

June 26, 2014

The U.S. dollar fell to the mid-101 yen level Friday morning in Tokyo, as weaker-than-expected U.S. consumer spending and employment data prompted traders to doubt the strength of the U.S. economic recovery.

At noon, the dollar fetched 101.51-53 yen compared with 101.67-77 yen in New York and 101.78-80 yen in Tokyo at 5 p.m. Thursday.

The euro was quoted at $1.3623-3623 and 138.27-30 yen against $1.3608-3618 and 138.38-48 yen in New York and $1.3623-3625 and 138.66-70 yen in Tokyo late Thursday afternoon.

The dollar drifted lower against the yen in the morning, inheriting its soft tone seen overnight in New York following the release of a spate of soft U.S. economic data, which came a day after a bigger-than-expected downward revision to U.S. gross domestic product data for the January-March quarter.

The Commerce Department said personal consumption expenditures increased 0.2 percent in May from the previous month, undershooting market expectations of a 0.4 percent rise, while its PCE inflation index rose 1.8 percent year on year in line with the market consensus.

The Labor Department said new applications for state unemployment benefits fell a smaller-than-expected 2,000 to a seasonally adjusted 312,000 for the previous week.

"The U.S. consumer spending data was very weak," said Toru Moritani, chief market economist at Sumitomo Mitsui Banking Corp.

"Given the sharp downward revision to the U.S. GDP, there had been some hope that we may see a good reading for the second quarter in reaction to the early fall. But the latest data dashed such hope," he said. "At least, U.S. Treasury yields are unlikely to rise so easily."

On the domestic front, the Japanese government said in the morning Japan's consumer prices rose 3.4 percent in May from a year earlier, the biggest increase in more than three decades.

The dollar-yen pair did not show an immediate reaction to the data as it was largely in line with market expectations, dealers said.

The yen also gained ground against the euro in the morning, in line with its strength against the dollar.

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Source: Japan Economic Newswire

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