News Column

Dollar hovers in lower 101 yen amid Europe bank jitters

July 10, 2014

The U.S. dollar traded in a boxed range in the lower 101 yen zone Friday morning in Tokyo as the dollar remained top heavy following yen buying spurred by a drop in global risk appetite.

At noon, the dollar fetched 101.32-33 yen compared with 101.29-39 yen in New York and 101.51-52 yen in Tokyo at 5 p.m. Thursday.

The euro was quoted at $1.3603-3603 and 137.82-84 yen against $1.3604-3614 and 137.85-95 yen in New York and $1.3634-3635 and 138.40-44 yen in Tokyo late Thursday afternoon.

The dollar held steady in Tokyo amid a lack of market-moving events, with low U.S. Treasury bond yields and a sense of uncertainty about the U.S. Federal Reserve's economic outlook offering little incentive to buy the dollar, said Minori Uchida, head of Tokyo global market research at the Bank of Tokyo-Mitsubishi UFJ.

In London overnight, concerns about the financial health of a major Portuguese bank triggered fears over the safety of eurozone financial institutions, leading traders to ditch the euro, Uchida said.

This also impacted the dollar, with dented stocks on both sides of the Atlantic spurring the sale of the dollar for the safe-haven yen, sending it to a one-and-a-half month low of 101.06 yen at one point in New York.

"But the Portuguese bank's troubles don't look like a sign of pervasive instability in the eurozone, and at any rate the European Central Bank has various safety nets at its disposal, so the effect of this should be temporary," Uchida said.

The jitters offered an opportunity for position adjustment as major currency pairs had been bound in a tight range for some time, he added.

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Source: Japan Economic Newswire

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