Dollar Stays Weak despite Warning about Strong Yen

Tokyo (News Today) - The dollar moved only narrowly against the yen in Asia on Monday, despite a warning by Japan’s finance minister about the yen’s renewed strength, analysts said. The dollar briefly topped 87 yen after Finance Minister Yoshihiko Noda said excessive volatility in currency rates could hurt economic activity, signaling his discomfort with the yen’s renewed strength.

But the dollar soon fell back, changing hands at 86.45 yen in Tokyo afternoon trade, compared with 86.47 yen in New York late Friday. The greenback fell to around 86.00 yen over the weekend, sparking fears for the earnings of Japanese exporters.

Noda told reporters Monday: “Excessive fluctuations or disorderly movements are not desirable for the stability of economies and financial markets, and from this perspective, I will properly monitor daily market movements”.

Rises in the yen could take steam out of Japan’s export-driven recovery, by making the nation’s products less competitive on global markets, and by reducing the yen value of international trade gains.

“The remark by the Japanese authorities briefly lifted the dollar above 87 yen... but lacked an impact to sustain the gain (in the dollar),” said Mizuho Corporate Bank market economist Daisuke Karakama.

The euro was trading at 1.3075 dollars, slightly up from 1.3054 dollars in New York, amid fears that the US economic recovery may be losing steam. The European unit also rose to 113.00 yen from 112.90.

“The market is now waiting for (US) jobs data due Friday” to get clues on how the world’s biggest economy is faring, Karakama said.

The US dollar was broadly lower against other Asian currencies. It fell to 1.3539 Singapore dollars from 1.3616 Friday, to 45.33 Philippine pesos from 45.58, to 31.80 Taiwan dollars from 32.00, to 1,172.30 South Korean won from 1,183.50 and to 32.19 Thai baht from 32.26. However it edged up to 8,945.00 Indonesian rupiah from 8,944.00.

Source : kompas

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