Yen hits new low against euro,on backfoot against dollar
Tuesday, 19 June 2007
TOKYO, June 18 (AFP): The yen slipped to a record low against the euro in Asian trade today as expectations faded of a quick hike to Japan's super-low interest rates, dealers said.
Market players also digested softer-than-expected inflation figures from the United States, which led to a late-week rally on equity markets.
The euro hit a record high of 165.42 yen in Tokyo afternoon trade from 165.20 late Friday in New York. The single European currency also firmed to 1.3394 dollars from 1.3379.
The dollar firmed to 123.56 yen from 123.45, hovering near a four-and- a-half year high of 123.66 last seen in December 2002.
The United States last week reported headline inflation of 0.7 per cent in May, a bigger rise than the 0.6 per cent expected.
But the more closely watched core rate-which excludes volatile food and energy prices-rose by just 0.1 per cent, below forecasts, boosting equities markets.
The yen was on the backfoot after Bank of Japan governor Toshihiko Fukui expressed little concern about the currency's weakness Friday and gave no hints on the timing of any future interest rate rise.
Japanese central bank policymakers left the key overnight rate unchanged at 0.5 per cent, with no members voting for a rate hike.
"Governor Fukui spoke in a somewhat dovish manner," Umemoto
said. "He is very relaxed because inflation expectations are subdued here in Japan and the political situation is also deteriorating."
In a thin week on the economic calendar, the market will be attentive to US housing data although they expect few surprises, dealers said.
The dollar was mixed against other Asian currencies.
The dollar eased to 1.5374 Singapore dollars from 1.5412 Friday, to 927.40 South Korean won from 929.65 and to 9,040 Indonesian rupiah from 9,053.
It firmed to 32.58 Thai baht from 32.50, to 33.141 Taiwan dollars from 33.128 and to 46.72 Philippine pesos from 46.52.
Market players also digested softer-than-expected inflation figures from the United States, which led to a late-week rally on equity markets.
The euro hit a record high of 165.42 yen in Tokyo afternoon trade from 165.20 late Friday in New York. The single European currency also firmed to 1.3394 dollars from 1.3379.
The dollar firmed to 123.56 yen from 123.45, hovering near a four-and- a-half year high of 123.66 last seen in December 2002.
The United States last week reported headline inflation of 0.7 per cent in May, a bigger rise than the 0.6 per cent expected.
But the more closely watched core rate-which excludes volatile food and energy prices-rose by just 0.1 per cent, below forecasts, boosting equities markets.
The yen was on the backfoot after Bank of Japan governor Toshihiko Fukui expressed little concern about the currency's weakness Friday and gave no hints on the timing of any future interest rate rise.
Japanese central bank policymakers left the key overnight rate unchanged at 0.5 per cent, with no members voting for a rate hike.
"Governor Fukui spoke in a somewhat dovish manner," Umemoto
said. "He is very relaxed because inflation expectations are subdued here in Japan and the political situation is also deteriorating."
In a thin week on the economic calendar, the market will be attentive to US housing data although they expect few surprises, dealers said.
The dollar was mixed against other Asian currencies.
The dollar eased to 1.5374 Singapore dollars from 1.5412 Friday, to 927.40 South Korean won from 929.65 and to 9,040 Indonesian rupiah from 9,053.
It firmed to 32.58 Thai baht from 32.50, to 33.141 Taiwan dollars from 33.128 and to 46.72 Philippine pesos from 46.52.