Dollar lower vs yen in Asia, but traders say its downside limited
The dollar fell against the yen in Asia Thursday as investors decreased their holdings of the dollar for year-end settlements, but traders say its downside is limited.
By Agencies |
TOKYO: The dollar fell against the yen in Asia Thursday as investors decreased their holdings of the dollar for year-end settlements, but traders say its downside is limited.
The dollar was trading at 113.21 yen midafternoon in Tokyo, down from 113.35 yen late Wednesday in New York. The euro fell to US$1.4372 from US$1.4381.
Tokyo dealers said the dollar has been supported by regular month-end buying by Japanese importers and trust funds, as well as banks, which need liquidity toward the year-end.
``This demand will probably last for the rest of this year. The dollar won't deviate much from the 113 yen levels,'' said Yuji Saito, head of foreign exchange at Societe Generale.
As the currency pair's volatility eases, Japanese individual investors, who like to sell low-yielding yen to invest in assets with higher returns, are making a comeback, said Masanobu Ishikawa, manager of foreign exchange at Tokyo Forex and Ueda Harlow.
ADVERTISEMENT
For these investors, it makes little sense to buy the yen, as its interest rates continue to be the lowest among the industrialized nations in the months to come. Earlier in the day, the Bank of Japan's board members unanimously voted to keep rates unchanged at 0.5 percent. Though the result was widely expected, the first unanimous decision in six months suggests the central bank may not be able to hike rates even in the first half of next year, said Shinkin Central Bank's senior dealer Jun Kato.
Against other currencies, the dollar was mostly higher. It rose 0.52 percent against Philippine peso to 41.760 while adding 0.39 percent against South Korean won to 943.0.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
