TOKYO: The yen edged down in Asia on Monday despite the US warning that Tokyo should avoid competitive devaluation of its currency and as investors were on alert for an expected missile launch by North Korea.
The dollar was changing hands at 98.55 yen, slightly up from 98.37 yen in New York Friday afternoon but still sharply down from 99.46 yen in Tokyo earlier Friday.
The euro firmed to 129.10 yen from 128.89 yen in US trade while holding steady at $1.3099.
Eyes were on North Korea Monday.
Despite tension-reducing noises from Seoul and Washington, the secretive communist state was expected to mark the birthday of its late founder by launching a missile.
South Korean intelligence says the North has had two medium-range missiles primed and ready to fire for nearly a week.
The yen rose Friday after the United States said it was monitoring Japan's policies and urged Tokyo to avoid "competitive devaluation" of its currency.
"Following the warning from the US on Japan's currency policy, I don't expect the yen to weaken every day," a senior dealer at a major Japanese trust bank said.
"Still, you can't buy the yen that aggressively because the BoJ's easing will continue."
The Bank of Japan earlier this month announced bold steps of monetary easing to beat deflation, sending the dollar soaring close to 100.00 yen, a level it last hit four years ago.
The US Treasury, in a twice-yearly report on foreign-exchange policies to Congress on Friday, raised questions about Japan's efforts to reflate its economy.
It urged Tokyo "to remain oriented towards meeting respective domestic objectives using domestic instruments and to refrain from competitive devaluation and targeting its exchange rate for competitive purposes".
A lower yen is good for Japanese exporters as it makes their products more competitive abroad and increases their income when repatriated.
As for the euro-dollar, BNZ FX strategist Kymberly Martin tipped a tight range ahead of US data in the form of the US Empire State Manufacturing survey and NAHB housing data later Monday.
"The risk for US data tonight is they underwhelm, following the trend seen on Friday. This could see the euro benefit on a relative basis," continuing the euro's current uptrend against the dollar, she said.
US retail sales figures released Friday were poor.
The Commerce Department reported a 0.4 percent drop in March retail sales compared with February, and a media report said that the IMF has lowered its forecast for US growth to 1.7 percent.
Comments
Comments are closed.