Yen lifted by Moody's upgrade
Tuesday, 1 July 2008
TOKYO, June 30 (AFP): The yen rose against other major currencies in Asian trade today after Moody's upgraded Japan's domestic debt rating on hopes of continued fiscal reform and an economic recovery, dealers said.
They said the euro was slightly higher against the dollar ahead of an expected interest rate rise by the European Central Bank this week.
The dollar dropped to 105.65 yen in Tokyo afternoon trade from 106.11 in New York late Friday.
The euro fell to 167.03 yen from 167.22 but firmed to 1.5794 dollars from 1.5790.
Traders bought the yen after Moody's Investors Service upgraded Japan's local-currency government bonds by one notch to Aa3, the fourth-highest rating, Jun Kato, a senior dealer at Shinkin Central Bank, told Dow Jones Newswires.
Sentiment towards the dollar also "does not look great" following last week's US economic indicators, Kato said. The market was looking ahead to Thursday's ECB decision, with a 25- basis-point interest rate rise to 4.25 per cent expected in response to simmering inflation.
Markets will be looking for clues from ECB chief Jean-Claude Trichet on the future direction of rates in the 15-member eurozone, with the rate rise expected to be a one-off for now as the economy loses steam, dealers said.
The dollar's weakness against the euro "was limited by receding expectations of a series of rate hikes in Europe amid uncertainty over the economic outlook," said Yuya Koike, forex strategist at Hachijuni Bank.
The interest rate gap between the eurozone and the United States-the Federal Reserve's key rate is at 2.0 per cent-has weighed on the dollar, which has also been weakened by lacklustre US economic growth.
"If US economic indicators turn out to be weaker than expected, the dollar may fall below 105 yen this week," said Yuji Saito, head of foreign exchange at Societe Generale in Tokyo.
Against regional Asian currencies, the dollar fell to 1.3616 Singapore dollars from 1.3646 Friday, to 30.37 Taiwan dollars from 30.40 and to 33.53 Thai baht from 33.56.
But it rose to 1,046.05 South Korean won from 1,044.95, to 44.87 Philippine pesos from 44.76 and to 9,225.00 Indonesian rupiah from 9,217.50.
They said the euro was slightly higher against the dollar ahead of an expected interest rate rise by the European Central Bank this week.
The dollar dropped to 105.65 yen in Tokyo afternoon trade from 106.11 in New York late Friday.
The euro fell to 167.03 yen from 167.22 but firmed to 1.5794 dollars from 1.5790.
Traders bought the yen after Moody's Investors Service upgraded Japan's local-currency government bonds by one notch to Aa3, the fourth-highest rating, Jun Kato, a senior dealer at Shinkin Central Bank, told Dow Jones Newswires.
Sentiment towards the dollar also "does not look great" following last week's US economic indicators, Kato said. The market was looking ahead to Thursday's ECB decision, with a 25- basis-point interest rate rise to 4.25 per cent expected in response to simmering inflation.
Markets will be looking for clues from ECB chief Jean-Claude Trichet on the future direction of rates in the 15-member eurozone, with the rate rise expected to be a one-off for now as the economy loses steam, dealers said.
The dollar's weakness against the euro "was limited by receding expectations of a series of rate hikes in Europe amid uncertainty over the economic outlook," said Yuya Koike, forex strategist at Hachijuni Bank.
The interest rate gap between the eurozone and the United States-the Federal Reserve's key rate is at 2.0 per cent-has weighed on the dollar, which has also been weakened by lacklustre US economic growth.
"If US economic indicators turn out to be weaker than expected, the dollar may fall below 105 yen this week," said Yuji Saito, head of foreign exchange at Societe Generale in Tokyo.
Against regional Asian currencies, the dollar fell to 1.3616 Singapore dollars from 1.3646 Friday, to 30.37 Taiwan dollars from 30.40 and to 33.53 Thai baht from 33.56.
But it rose to 1,046.05 South Korean won from 1,044.95, to 44.87 Philippine pesos from 44.76 and to 9,225.00 Indonesian rupiah from 9,217.50.