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Dollar gains on yen after Japanese data

Dollar gains on yen after Japanese data

The dollar edged up against the yen but slipped against the euro in Asian trade yesterday after mixed economic data in Japan and signals of further rate hikes in the eurozone, dealers said.
Volumes were thin during the holiday season, with markets closed overnight in North America and Europe.
The dollar edged up to 118.92 yen in Tokyo afternoon trade from 118.85 late Monday in Tokyo, moving closer to a two-month high of 119.36 yen posted on October 25.
The euro rose to 1.3124 dollars from 1.3109 and to 156.03 yen from 155.80.
Japan yesterday reported a rise in its core consumer price index (CPI) for November but also another fall in household spending - data seen as not robust enough to trigger another interest rate hike.
The Bank of Japan last week kept its benchmark borrowing rate at a superlow 0.25 percent, with Governor Toshihiko Fukui acknowledging recent weak data.
Fukui again on Monday signalled caution about quick rate hikes.
"The (inflation figures) came in as predicted and it's difficult to determine whether the Bank of Japan will raise rates next month because there's no sure reason why everyone would agree to a rate hike," said Noriaki Ichikawa, forex dealer at Hachijuni Bank.
Sumitomo Mitsui Banking strategist Daisuke Uno said the market was already betting against the Bank of Japan raising interest rates at its January 17-18 policy board meeting.
"There seems to be only Japanese players in the forex market today and they are generally hesitant to drive the market in either direction at a time when foreign investors are not in," Uno said.
With no clear domestic lead, dealers said that the market focused on the eurozone after Germany recently reported strong business confidence.
Germany's central bank chief Axel Weber, who sits on the European Central Bank's decision-making council, also said in remarks published Friday that eurozone rates were still too low even though they have been raised six times in the past 12 months.
"With the German economy robust, traders will be focused on the European unit for quite some time," Ichikawa said.
In Thailand, the central bank governor said yesterday that currency control measures that rattled the stock market could remain in place for up to six months.
Bank of Thailand Governor Tarisa Watanagse told The Associated Press that last week's measures - which restrict foreign capital inflows into the bond and commercial paper markets - must remain in place for at least three to six months to ensure they actually curb the baht's appreciation.
"Once the baht is moving in line with regional currencies, the measures will become unnecessary," Tarisa said.
Analysts said they were not surprised the measures would be in place for some time, saying the announcement is unlikely to have a major impact on the market.
"Removing these measures too quickly is not a good thing for either the central bank or the market," Tisco Securities analyst Isara Ordeedolchest said. "There has been a fair amount of speculative activities and if Thailand sends a signal that we are serious about stemming speculative flows, it will be positive in the long term."
The dollar slipped to to 36.40 Thai baht from 36.43, and to 9,065 Indonesian rupiah from 9,080 on Friday.
The unit edged up to 929.65 South Korean won from 928.60 but stayed flat at 49.28 Philippine pesos.


Updated : 2021-04-17 20:35 GMT+08:00