By Dow Jones Business News,
August 14, 2014, 01:45:00 AM EDT
By Tatsuo Ito
The dollar rose against the yen in Asia Thursday as investors snapped up the greenback amid improved risk sentiment,
buoyed by a rising stock market.
Initially, traders had expected calm amid the traditional Japanese summer holiday. But sudden bids from overseas and
domestic investors pushed the greenback as high as Y102.66, the highest since Aug. 5.
At 0450 GMT, the dollar was at Y102.58 against Y102.45 late Wednesday in New York.
Traders couldn't find clear reasons behind the move. But some think the purchases might be based on the renewed view
that the U.S. economy has performed better than the Japanese, which suffered a sharp contraction in the April-June
quarter. Currencies with strong economies and higher rates normally gain as they offer greater investment returns.
"Hard data in the U.S. on the whole suggest that the economy is in good shape, despite some slack in the labor
market," said Yasuaki Amatatsu, currency analyst at Bank of Tokyo-Mitsubishi UFJ.
"Meanwhile, uncertainty over when the U.S. Federal Reserve will start raising rates, along with lingering concerns
about geopolitical risks, are a drag on the dollar's further advance," he added.
Yunosuke Ikeda, head of FX strategy at Nomura Securities, said that while a speech at Jackson Hole, Wyo., by U.S. Fed
chair Janet Yellen on Aug. 21 will be a key event for the market, participants haven't so far built up dollar positions
by betting Ms. Yellen's remarks will favor the dollar.
This means the outcome is unlikely to disappoint traders or trigger a selloff in the pair, Mr. Ikeda said, adding
there was a higher chance that the pair's gains would accelerate.
Since the Fed's scaling back of its asset purchases will end in October, its September policy meeting is considered
more important than the Jackson Hole event as a place to look for clarification of the Fed's policy stance, he said.
Elsewhere in Asia, the dollar fell against the South Korean won after the Bank of Korea decided to cut its benchmark
interest rate by 0.25 percentage point. The market move was seen as typical case of "buy the rumor and sell the news."
The rate cut had been mostly priced in since rumors started circulating in July, one trader said. The dollar was at
KRW1,022.3 from Wednesday's close of KRW1,028.9.
The U.K. pound remained weak at $1.6680 against $1.6692 after falling overnight on a lackluster report on wage growth
that raised the prospect of the central bank pushing back any interest-rate increase.
Interbank Foreign Exchange Rates At 00:50 EST / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
2150 GMT High Low 12/31
USD/JPY Japan 102.57-60 102.40-43 +0.16 102.65 102.40 -2.59
EUR/USD Euro 1.3363-64 1.3363-67 -0.01 1.3370 1.3357 -2.77
GBP/USD U.K. 1.6678-82 1.6687-91 -0.05 1.6692 1.6672 +0.74
USD/CHF Switzerland 0.9074-78 0.9073-77 +0.02 0.9082 0.9074 +1.64
USD/CAD Canada 1.0915-20 1.0911-16 +0.04 1.0921 1.0912 +2.78
AUD/USD Australia 0.9295-98 0.9303-06 -0.08 0.9309 0.9288 +4.28
NZD/USD New Zealand 0.8466-70 0.8456-60 +0.12 0.8488 0.8456 +3.00
EUR/JPY Japan 137.06-10 136.87-93 +0.13 137.11 136.86 -5.29
Source: ICAP PLC
Ewen Chew contributed to this article.
Write to Tatsuo Ito at firstname.lastname@example.org
(END) Dow Jones Newswires
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