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Dollar slips in Asian trading following Wall Street's overnight drop

Dollar slips in Asian trading following Wall Street's overnight drop

The dollar slipped against the yen Wednesday in Asia as players bought the Japanese currency following Wall Street's overnight plunge.
The U.S. dollar was trading at 114.37 yen late afternoon, down from 114.56 yen Tuesday in New York. The euro fell to US$1.3593 from US$1.3634.
Early in the session, many traders that expected Japanese shares to fall sharply after Wall Street's tumble bought yen ahead of the Tokyo stock market open. Investment banks cutting losses followed suit, causing the yen to gain further.
The Japanese currency rose as far as 113.86 yen against the dollar at one point before the early gains were wiped out.
Traders said market jitters are unlikely to fade very soon, with European and U.S. stocks likely to fall on negative cues from Asia.
"Right now the market is operating in a rather negative trend and we see an unwinding of funds in all sorts of places, not only in carry trade positions," said Satoshi Tate, senior dealer at Mizuho Corporate Bank.
Traders have said the yen has been rising partly because the credit market turmoil has prompted investors to unwind so-called yen-carry trades, in which they borrow yen cheaply and invest the money in higher-yielding currencies. To unwind the yen-carry trades investors have to buy yen to repay the cheap loans.
On Wall Street Tuesday, the Dow Jones Industrial Average fell 2.1 percent on data showing falling U.S. consumer confidence, a sharp decline in U.S. home prices and ratings downgrades of some financial firms due to the credit market problems.
Against other regional currencies Wednesday in Asia, the dollar was mostly higher, rising to 942.0 South Korean won from 939.7 the previous day, and 3.5025 Malaysian ringgit from 3.4940. It fell to 1.5257 Singapore dollars from 1.5260.


Updated : 2021-03-08 03:29 GMT+08:00