Yen eases against dollar in Asia

Friday July 10, 2009

TOKYO: The yen fell slightly against the dollar in Asian trade Friday as investors regained some of their appetite for risk, reducing the appeal of the ‘safe-haven’ currency, dealers said. The dollar edged up to 93.02 yen in Tokyo morning trade from 92.96 in New York late Thursday. The euro eased to 1.3993 dollars from 1.4024 and to 130.16 yen from 130.42. The yen drifted lower as Japanese funds prepared to purchase risky higher-yielding currencies of emerging economies such as Brazil, Turkey and South Africa, Royal Bank of Scotland strategist Masafumi Yamamoto said. But the yen, which is seen as a safe haven during times of economic turmoil, could resume its rally if US consumer data or earnings reports due out later in the day disappoint markets, he told Dow Jones Newswires. If the University of Michigan consumer sentiment index shows a big fall, "that could lead to stock weakness and yen strength," Yamamoto said. On Wednesday the dollar fell to a near five-month low of 91.81 yen, adding to worries about the outlook for Japanese exports. Economic and Fiscal Policy Minister Yoshimasa Hayashi said that the yen's rise posed a threat to the fragile economy. "If the yen's rise and stock declines last a long time, there are concerns they may have a negative impact on both exporter and overall sentiment," he told reporters. "For this reason, we need to keep monitoring moves in the stock and currency markets closely," he added. Markets are watching Japanese officials' comments carefully for any signs that Tokyo may be considering intervening in the market to curb the yen's rise, although analysts say it is unlikely to make a move at current levels. The British pound gave back some of its sharp gains seen on Thursday, when a decision by the Bank of England not to expand its emergency asset purchase facility surprised markets. The pound fell to 1.6279 dollars from 1.6341. Traders were also digesting data showing that Japanese wholesale prices dropped by a record 6.6 percent in June from the previous year, deepening concerns that the economy is heading into another bout of deflation. (AFP)