Dollar edges up in Asia after weak US data


TOKYO: The dollar edged up in Asia on Tuesday after sinking in New York following a poor manufacturing report that pointed to weakness in the world’s largest economy.

The greenback fell below 100 yen for the first time in nearly a month on Monday as the ISM purchasing managers index for May showed a surprise contraction.

Markets are watching US jobs data this week for more clues about the state of the economy, a key factor that could shed light on whether the US Federal Reserve rolls backs its monthly asset-buying plan, known as quantitative easing, in the near term.

In afternoon Tokyo trade the dollar fetched 99.80 yen, against 99.52 yen in New York late Monday, although it is down considerably from the levels around 100.46 yen in Asia earlier Monday.

Yuji Saito, director of foreign exchange at Credit Agricole, said markets would keep a close eye on a speech on Wednesday by Japanese Prime Minister Shinzo Abe about the government’s growth strategy.

Investors “will be watching to see if there is anything that would excite Japanese stock markets,” he told Dow Jones Newswires.

Movements in dollar-yen trade and the Tokyo stock market are closely interlinked as the value of the currency directly affects the profitability of Japanese exporters.

Japanese officials Tuesday played down the yen’s volatility, which has seen it fall from 80 to the dollar in November to 103 last month.

“The yen has rapidly weakened from such high levels,” Chief Cabinet Secretary Yoshihide Suga told a regular press briefing.

“It is natural for the market to adjust itself.”

The euro bought $1.3060 and 130.31 yen from $1.3076 and 130.13 yen in US trade, with the single currency supported by May manufacturing data that showed a slight improvement from April, in line with other recent economic data.

“The euro was done no harm by some modest upward revisions” to the manufacturing data, National Australia Bank said.

The European Central Bank, which holds a policy meeting later this week, cut interest rates last month in an attempt to stimulate the eurozone’s recession-hit economy.

The dollar was mostly lower against other Asia-Pacific currencies Tuesday.

It slipped to Sg$1.2523 from Sg$1.2592 Monday afternoon, to Tw$29.91 from Tw$29.94, to 1,122.20 South Korean won from 1,127.55 won and to 41.93 Philippine pesos from 42.22 pesos.

The greenback also weakened to 9,798 Indonesian rupiah from 9,895 rupiah and to 30.41 Thai baht from 30.45 baht while it firmed to 56.61 Indian rupees from 56.44 rupees.

The Australian dollar rose to 97.22 US cents from 96.28 cents while the Chinese yuan slipped to 16.25 yen from 16.38 yen.


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