News Column

Dollar inches up in mid-102 yen range after Japan data rebound

August 13, 2014

The U.S. dollar inched up in the mid-102 yen range as traders' risk appetite was supported by a rebound in Japan's machinery orders for June after two months of decline.

At noon, the dollar fetched 102.57-58 yen compared with 102.37-47 yen in New York and 102.45-47 yen in Tokyo at 5 p.m. Wednesday.

The euro was quoted at $1.3359-3360 and 137.03-04 yen against $1.3359-3369 and 136.82-92 yen in New York and $1.3351-3352 and 136.78-82 yen in Tokyo late Wednesday afternoon.

Market sentiment was buoyed by an increase of 8.8 percent in Japan's June private-sector machinery orders excluding ships and utilities which was released by the Cabinet Office on Thursday.

The orders had logged a record drop of 19.5 percent in May and a 9.1 percent decline in April following a 3-percentage-point consumption tax hike on April 1.

Investors were relatively upbeat even though the rebound was smaller than market expectations of about 15 percent because "downside risks have subsided now that the machinery orders and gross domestic product data are out," said Toru Moritani, chief market economist at Sumitomo Mitsui Banking Corp.

The April-June GDP figure released Wednesday was mostly in line with economists' forecasts, shrinking an annualized 6.8 percent in real terms.

The euro was also bought against the yen after the machinery orders data, but the European currency could come under selling pressure after the release of the eurozone's April-June GDP data and a final reading of consumer prices in the area later Thursday, Moritani said.

"Recent economic indicators from Europe, Germany in particular, have been dropping at quite an acute angle. The GDP may fall into negative territory," he said.

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Source: Japan Economic Newswire

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