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Dollar rises against yen amid growing speculation Japan won't raise rates soon

Dollar rises against yen amid growing speculation Japan won't raise rates soon

The dollar rose against the yen in Asian trading Monday amid growing speculation that Japan's central bank may not raise interest rates next month.
The dollar bought 121.80 yen mid-afternoon Monday, up from 121.58 yen late Friday in New York. The euro fell to US$1.2904 from US$1.2910.
Traders said that the dollar may soon climb above 122 yen for the first time since December 2002, given the wide interest rate gap between the U.S. and Japan.
The government announced data Monday showing the country's retail sales in December fell 0.3 percent on year, down for a second straight month, suggesting consumer spending is weak. That sluggish data, as well as the tame consumer price figures released Friday, has deflated expectations for a near-term rate increase by the Bank of Japan, traders said.
Players are now shifting their focus on household spending data for December, due out Tuesday and gross domestic product figures, to be released in mid-February.
If household spending data come in weak, that "may hamper the central bank from raising interest rates even if the GDP data turn out to be strong," said Tohru Sasaki, strategist at JPMorgan Chase Bank.
Economists surveyed by Dow Jones Newswires forecast on average that household spending in December fell 1.2 percent from a year earlier, after a 0.7 percent drop in November.
Traders are also closely watching the two-day Federal Open Market Committee meeting starting Tuesday for clues on the Fed's assessment of U.S. economic conditions.
Against other Asian currencies, the dollar was mostly higher, rising to 1.54 Singapore dollars from 1.5380 Friday and to 49.17 Philippine pesos from 48.97 Friday.


Updated : 2021-04-19 03:43 GMT+08:00