Yen extends rebound in Asian trading, euro down vs. dollar
AFPTOKYO--The yen extended a rebound Wednesday following multiweek declines after Japan's economy minister warned the unit's freefall could jeopardize any recovery in the world's number three economy.
January 17, 2013, 12:03 am TWN
In afternoon Tokyo trade, the dollar slipped to 88.07 yen against 88.80 yen in New York Tuesday afternoon, while the euro fetched 117.00 yen against 118.14 yen in U.S. trading.
The euro was also weaker at US$1.3284 from US$1.3304 after a top European official said the 17-nation currency was “dangerously” overvalued.
“Selling (of the dollar) is coming from not only overseas hedge funds but also from Japanese exporters,” Atsushi Hirano, head of FX sales in Japan at the Royal Bank of Scotland, told Dow Jones Newswires.
Japanese exporters who had been watching the dollar ascending rapidly against the yen started selling the greenback, Tokyo dealers said.
Japan's new Prime Minister Shinzo Abe came to power last month with promises of massive spending and calls for aggressive central bank easing to boost the economy, pushing the yen into a steep decline. Easing tends to weaken the unit.
Abe said Wednesday he wants the next Bank of Japan chief to be “someone who can appreciate my belief” on monetary policy, according to Kyodo news agency.
Current Governor Masaaki Shirakawa's five-year term ends in April and there has been tension between the two men over how to stoke growth.
Three months ago, the dollar traded below the 79 yen level, after hitting a low around 75 yen in late 2011, sparking appeals for action from Japan's exporters whose products become pricier overseas when the unit is strong.
The dollar had almost touched the 90-yen level on Monday.
However, Japan's economy minister Akira Amari warned Tuesday that the yen's fast decline could hurt consumers by making imports more expensive as the economy struggles to cement a recovery.
Weighing on the euro was a report quoting Jean-Claude Juncker, head of the eurozone finance ministers' group and Luxembourg's prime minister, as saying the euro is “dangerously high.”
His comments mean “the potential for bouts of risk aversion ... will likely bring about, ironically, periodic bouts of USD strength,” National Australia Bank said in a note.
The dollar was mixed against other Asia-Pacific currencies, rising to 40.66 Philippine pesos from 40.55 pesos on Tuesday, to 1,058.73 South Korean won from 1,054.85 won and to 54.82 Indian rupees from 54.53 rupees.
The greenback sliped to SG$1.2247 against SG$1.2248.
It was also weaker at 29.86 Thai baht from 30.09 baht and 9,715 Indonesian rupiah from 9,869 rupiah.
The Australian dollar edged up to US$1.0549 from US$1.0544, while China's yuan slipped to 14.14 yen from 14.30 yen.