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US dollar falls vs yen in Asia on Bhutto's death, exporters settling accounts before holidays

US dollar falls vs yen in Asia on Bhutto's death, exporters settling accounts before holidays

The dollar dropped against the yen in Asia Friday as traders reacted anxiously to the assassination of Pakistani opposition leader Benazir Bhutto and Japanese exporters settled accounts before going on their long New Year's holidays.
The dollar was trading at 112.92 yen in midafternoon in Tokyo, down from 113.69 yen late Thursday in New York. The euro fell to US$1.4622 from US$1.4627.
Tokyo players said the dollar will likely continue to fall throughout the day, probably at a faster pace, as players reduce their riskier assets following Bhutto's assassination Thursday, just days before Jan. 8 elections. Traders worried that her death might spark instability in a volatile region.
"It's clearly a dollar-selling factor since the U.S. is deeply involved with Pakistan," said Yuji Saito, head of foreign exchange at Societe Generale. "And Bhutto's news will likely lead to rises in oil prices, which would increase risks of the U.S. economy entering stagflation."
Traders say short-term players, who are wary about the greenback's outlook, are ready to sell the currency to lock in profits, using risk-aversion as an excuse.
Earlier Friday, Japan released several economic indicators, including employment figures that showed the jobs-to-applicants ratio in November fell to a two-year-low of 0.99, meaning there aren't enough jobs going around for people looking for employment.
However, reactions in the currency market were muted since players anticipate the Bank of Japan wouldn't be able to hike its rates anytime soon anyway.
Against other Asian currencies, the dollar was mixed. It rose 0.11 percent against Indian rupee to 39.448 while dropping 0.44 percent against South Korean won to 936.0.


Updated : 2021-05-07 13:01 GMT+08:00