Yen drops in Asia as stocks rise
Tuesday, 21 October 2008
TOKYO, Oct 20 (AFP): The yen fell back in Asian trade today as plans for a summit on the global financial crisis helped to reassure skittish investors, dealers said.
The dollar rose to 102.01 yen in Tokyo afternoon trade from 101.63 in New York late Friday. The euro climbed to 137.30 yen from 136.33 and to 1.3465 dollars from 1.3408.
Although the market remained cautious, there were signs that government measures to try to ease a credit crunch are having a positive effect, said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.
The yen has risen sharply during the recent financial crisis as it is perceived as a fairly low-risk currency, so it tends to be pressured by any signs that the turmoil is easing.
"It wouldn't surprise me if the dollar rises as high as 105 yen in the near term," Mamoru Arai, a senior sales dealer at Mizuho Corporate Bank, told Dow Jones Newswires.
But while there have been recent signs of a thaw in frozen credit markets, worries are growing about the outlook for economic growth and company profits, dealers said.
China reported Monday that its economic growth slowed to 9.0 per cent in the third quarter of 2008. In the United States and Japan, a raft of corporate earnings reports are due to be released over the coming weeks.
The won strengthened against the dollar after South Korea announced a 130-billion-dollar package to calm financial markets.
The step was likely to give a temporary boost to the won, Barclays Capital analysts said.
"While it significantly reduces the risks of a large near- term outflow of funds from Korea, the underlying balance of payments problems remain, so the won will see only temporary relief from its downward trend," they said.
The won was trading at 1,311.4 to the greenback, compared with Friday's close of 1,334.
Against other Asian currencies, the dollar rose to 1.4780 Singapore dollars from 1.4765 on Friday, to 32.60 Taiwan dollars from 32.56, to 48.25 Philippine pesos from 48.03, and to 9,820 Indonesian rupiah from 9,799.
But it slipped to 34.27 Thai baht from 34.28.
The dollar rose to 102.01 yen in Tokyo afternoon trade from 101.63 in New York late Friday. The euro climbed to 137.30 yen from 136.33 and to 1.3465 dollars from 1.3408.
Although the market remained cautious, there were signs that government measures to try to ease a credit crunch are having a positive effect, said Saburo Matsumoto, chief forex strategist at Sumitomo Trust Bank.
The yen has risen sharply during the recent financial crisis as it is perceived as a fairly low-risk currency, so it tends to be pressured by any signs that the turmoil is easing.
"It wouldn't surprise me if the dollar rises as high as 105 yen in the near term," Mamoru Arai, a senior sales dealer at Mizuho Corporate Bank, told Dow Jones Newswires.
But while there have been recent signs of a thaw in frozen credit markets, worries are growing about the outlook for economic growth and company profits, dealers said.
China reported Monday that its economic growth slowed to 9.0 per cent in the third quarter of 2008. In the United States and Japan, a raft of corporate earnings reports are due to be released over the coming weeks.
The won strengthened against the dollar after South Korea announced a 130-billion-dollar package to calm financial markets.
The step was likely to give a temporary boost to the won, Barclays Capital analysts said.
"While it significantly reduces the risks of a large near- term outflow of funds from Korea, the underlying balance of payments problems remain, so the won will see only temporary relief from its downward trend," they said.
The won was trading at 1,311.4 to the greenback, compared with Friday's close of 1,334.
Against other Asian currencies, the dollar rose to 1.4780 Singapore dollars from 1.4765 on Friday, to 32.60 Taiwan dollars from 32.56, to 48.25 Philippine pesos from 48.03, and to 9,820 Indonesian rupiah from 9,799.
But it slipped to 34.27 Thai baht from 34.28.