Dollar drops on low US bond yields
AFP Saturday, May 31, 2014, 12:00 am TWN
TOKYO--The dollar fell further in Asia on Friday with investors discouraged by low yields on U.S. bonds and caution ahead of market-moving events set for next week.
Dealers were unfazed by Japanese economic data released early Friday, saying drops in spending and industrial output had been well expected.
The dollar fetched 101.55 yen in Tokyo afternoon from 101.78 yen in New York Thursday afternoon.
The euro bought US$1.3604 against US$1.3601 in U.S. trade while falling to 138.21 yen from 138.44 yen.
U.S. bond yields fell to their lowest in nearly one year on Thursday as investors fled to safety due to a sharp downward revision in the U.S. first-quarter gross domestic product.
Yields on the 10-year U.S. Treasury bond briefly sank to 2.44 percent, a level last seen in June 2013, down from the 12-month peak of 3.0 percent.
Revised data from the U.S. Commerce Department showed the economy contracted in the first quarter by 1.0 percent, double the amount analysts estimated.
The revision reversed the initial estimate of 0.1 percent growth, underscoring its struggle to gain momentum nearly five years after exiting recession.
The dollar was also under pressure due to selling by Japanese exporters related to business settlement ahead of monthly book closing, Shinji Kureda, head of FX trading group of Sumitomo Mitsui Banking, told Dow Jones Newswires.
The ECB has held its key interest rates at their current all-time lows since November.
The dollar was mixed against other Asia-Pacific currencies.
It fell to 1,020.56 South Korean won from 1,021.32 won on Thursday, to SG$1.2547 from SG$1.2550, and to 43.83 Philippine pesos from 43.98 pesos.
It rose to 58.99 Indian rupees from 58.80 rupees and to 32.77 Thai baht from 32.75 baht, while staying unchanged at 11,632.50 Indonesian rupiah.
The Australian dollar rose to 93.25 U.S. cents from 92.76 cents, while the Chinese yuan bought 16.24 yen against 16.21 yen.
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