Yen eases versus rivals as market awaits US, Japan central banks
The yen slightly weakened against its rivals during Asia trade on Wednesday, as investors await monetary-policy decisions by the U.S. Federal Reserve and the Bank of Japan on Wednesday and Thursday.
The U.S. dollar was changing hands at ¥106.17. The greenback fell to as low as ¥105.63 Tuesday, coming closer to its year-to-date low of ¥105.55 set on May 3, but ratcheted up to ¥106.09 late Tuesday in New York.
The euro also gained to ¥118.99 from ¥118.89 late Tuesday. The common currency had touched ¥118.51 Tuesday, its lowest level since January 2013. The U.K. pound also rose to ¥150.18 midday after falling to ¥149.20 on Tuesday, its lowest in nearly three years.
Investors sought the safety of the Japanese currency given the increasingly uncertain outcome of the “Brexit” vote next week. But they seemed to have held back to take yen buying positions for now, as they briefly shifted from their main focus to monetary policy meetings in the U.S. and Japan.
In addition to dollar buying from Japanese corporate players such as importers earlier in the morning, the solid performance of Asian stocks induced selling of the perceived safety of the yen. The Shanghai Composite Index pared losses to gain 0.9%, shrugging off MSCI Inc.’s surprise decision not to include a batch of mainland China shares in its widely tracked indexes. The Nikkei Stock Average rose 0.7% in late trading.
“We saw short covering earlier today,” pushing up the dollar against the yen, said Yuzo Sakai, manager of FX business promotion at Tokyo Forex & Ueda Harlow.
Sentiment also improved in keeping with Asia stocks. “But we are still distance away from risk-on mood,” said Sakai, adding that the market still needs to weather risk events such as the U.S., Japan monetary policy meetings and the Brexit referendum.
In other currency-pair trading, the euro was at $1.1208 from $1.1204.
The WSJ Dollar Index a measure of the dollar against a basket of major currencies, was down 0.05% at 86.77.
Source: MarketWatch
