The dollar hit lower against the yen in Asian trade Tuesday, with comments by an adviser to Prime Minister Shinzo Abe keeping a lid on the greenback’s upward momentum.
The dollar USDJPY, -0.37% dropped to ¥119.80, compared with ¥120.13 late Monday in New York.
Koichi Hamada, one of Abe’s close economic advisers and a professor emeritus of Yale University, said on a Japanese TV program Monday night that a dollar level above ¥120 was excessively weak for the yen and that a fair value was around ¥105 considering purchasing power parity. The remarks sparked dollar selling overnight, quickly sending the greenback as low as ¥119.68 in New York.
In subsequent remarks Tuesday, Hamada reportedly said that yen selling was reaching its limits.
Dollar selling against the Singapore dollar, meanwhile, spread through the currency market, following a decision by monetary authorities in Singapore to stand pat on policy, contradicting a street consensus for change.
The Monetary Authority of Singapore kept its currency policy unchanged, saying that it expects the economy to grow at a moderate pace, adding that inflation is likely to remain subdued. The U.S. dollar fell to as low as S$1.3597 from around S$1.3720 early Tuesday.
“The dollar on the whole has entered a slight adjustment phase for now,” said Toshihiko Sakai, senior manager of the forex and financial products trading division at Mitsubishi UFJ Trust Banking.
For the rest of April, Sakai said he expects the dollar will likely remain in a ¥118-¥122 range as it continues to weigh up Greek concerns among other factors. The dollar “is unlikely to fall much (against the yen), but the upside looks heavy,” he said.
At a time when Greek concerns make it difficult to go ahead with common currency buying and ahead of a policy setting meeting by the European Central Bank on Wednesday, the euro EURUSD, -0.02% was slightly lower at $1.0555 from $1.0565.
The common currency hit as low as ¥126.50 against the yen, its lowest since June 18, 2013, before slightly bouncing back to ¥126.61. Those rates compare with ¥126.95 late Monday in New York.
The WSJ Dollar Index BUXX, -0.06% a measure of the dollar against a basket of major currencies, was unchanged at 88.31.