Yen strengthens in Asia despite easing speculation

In afternoon Tokyo forex trade, the U.S. dollar was weaker at 92.97 yen against 93.46 yen in New York Monday afternoon.

The dollar's decline was largely owing to Japanese institutional investors converting overseas income, meaning they were buying large amounts of yen, a senior dealer at a major Japanese bank told Dow Jones Newswires.

The greenback also faced pressure as the sequester — US$85 billion in mandatory cutbacks to U.S. government spending — came into effect, after lawmakers failed to agree on a less severe approach to shrinking the federal deficit.

The euro, meanwhile, inched down to 121.25 yen from 121.74 yen in U.S. trade.

The strengthening followed recent falls for the yen, which has been pushed down by expectations that the Bank of Japan will launch fresh credit easing measures when its new leaders take up their posts in the coming weeks.

The dollar was mixed against other Asia-Pacific currencies, slipping to SG$1.2440 from SG$1.2454 on Monday, to 1,086.45 South Korean won from 1,092.15 won, and to 54.76 Indian rupees from 54.96 rupees.

The greenback weakened to 40.70 Philippine pesos from 40.76 pesos, while firming to 9,710 Indonesian rupiah from 9,708 rupiah. It was flat at 29.78 Thai baht.

The Australian dollar rose US$1.0244 from US$1.0129, while the Chinese yuan eased to 14.93 yen from 15.01 yen.

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