Dollar Extends Gains Against Yen On Hawkish FOMC Minutes

By Dow Jones Business News, 
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By Alexander Martin

The dollar extended its gains against the yen during Asian trading Thursday after the minutes of the latest meeting of the Federal Open Market Committee sounded a more hawkish tone.

The greenback hit a new four-month high against the yen during morning trading, climbing to Y103.96. As of 0450 GMT, it was at Y103.85 from Y103.76 late Wednesday in New York.

Analysts said the pair was on its way toward the Y104 level, with key resistance at Y104.13, the April 4 high.

The minutes showed that FOMC members saw progress in the labor market and inflation picking up such that conditions were returning to the normal levels of before the financial crisis that peaked in 2008.

Eyes will now be on Federal Reserve Chairwoman Janet Yellen's speech Friday at the conference in Jackson Hole, Wyo.

IG Securities market analyst Junichi Ishikawa said the pair could continue to climb if Ms. Yellen maintains a hawkish tone. "Until then, I think we will be seeing the pair moving in a rather narrow range."

The market is now seeking further indications that the Fed is adjusting its views of the U.S. economy, and of its plans to raise interest rates. Higher rates would benefit the dollar, as investors would get greater returns from dollar-denominated assets.

Minori Uchida, chief currency analyst at the Bank of Tokyo-Mitsubishi UFJ, said the Nikkei Stock Average's strong performance also supported the pair.

"Improved risk sentiment is lifting the dollar broadly," he said. As the dollar went up, the euro fell to $1.3242, its lowest level in 11 months. At 0450 GMT it was at $1.3246 from $1.3260 late in New York.

The dollar index, which compares the dollar against a basket of currencies, was up 0.14% at 74.61.

Interbank Foreign Exchange Rates At 00:50 EST / 0450 GMT



                           Latest       Previous   %Chg    Daily    Daily   %Chg
Dollar Rates                               Close            High      Low  12/31

USD/JPY Japan           103.83-86      103.75-77  +0.08   103.96   103.68  -1.39
EUR/USD Euro            1.3244-46      1.3258-61  -0.11   1.3260   1.3243  -3.63
GBP/USD U.K.            1.6568-70     1.6594-605  -0.19   1.6600   1.6566  +0.07
USD/CHF Switzerland     0.9141-44      0.9132-36  +0.10   0.9145   0.9134  +2.38
USD/CAD Canada          1.0982-86      1.0965-72  +0.14   1.0984   1.0966  +3.41
AUD/USD Australia       0.9253-56      0.9287-90  -0.37   0.9291   0.9240  +3.81
NZD/USD New Zealand     0.8358-62      0.8372-76  -0.17   0.8376   0.8350  +1.69

Euro Rates

EUR/JPY Japan           137.55-58      137.55-60  -0.01   137.73   137.48  -4.96

Source: ICAP PLC

Write to Alexander Martin at alexander.martin@wsj.com


  (END) Dow Jones Newswires
  08-21-140147ET
  Copyright (c) 2014 Dow Jones & Company, Inc.


This article appears in: Forex and Currencies

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