Dollar Lower against Yen after Overnight Gains

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The dollar was lower against the yen in Asian trading Tuesday, with some investors moving to lock in profits after gains overnight in the greenback.

The euro, meanwhile, recouped earlier losses after briefly touching another fresh low of almost a year.

In late Asian trading, the dollar USDJPY, -0.15% was at ¥103.87 from ¥104.05 late Monday in New York.

The greenback’s upward run against the yen following Federal Reserve Chief Janet Yellen’s recent comments appears to have come to a halt for now as investors look to take profits.

Overall market ebullience also cooled as shown by a fall in the Nikkei Stock Index. The benchmark Nikkei was down 0.5% at midday, despite the S&P 500 closing at an all-time high overnight.

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Selling by Japanese exporters and short-term players also helped trim the dollar to as low as ¥103.80 in mid-morning trade.

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“I think (the dollar) needs fresh cues to step out of where it is now,” said Kengo Suzuki, chief strategist at Mizuho Securities.

“With all launch pads rising into upward positions following the comments by Ms. Yellen, investors are waiting for economic indicators to see if they can turn up things another notch,” Mr. Suzuki said, adding that data such as U.S. GDP later this week will be closely monitored.

The Fed chief reiterated in a speech to central bankers that the Fed could increase rates sooner than the mid-2015 timeline the market expects, if consumer prices and wages rise.

Meanwhile, the euro EURUSD, -0.01% was at $1.3203 from $1.3192 after falling as low as $1.3178–its lowest since early September last year–amid expectations for quantitative easing among other steps by the European Central Bank.

Underscoring the tough situation in the euro zone economy, German business confidence declined more than expected in August, a closely watched business survey from the Munich-based Ifo Institute survey showed.

“If U.S. housing related index later today shows stronger-than-market consensus, upward pressure on U.S. stocks and bond yields will intensify,” thus dragging down the euro toward $1.3100, said Junichi Ishikawa, market analyst at IG Securities.

The euro EURJPY, -0.17% was at ¥137.14, compared with ¥137.27.

The WSJ Dollar Index BUXX, -0.04% a measure of the dollar against a basket of major currencies, was down 0.08% at 74.63.

Source: Marketwatch