By Hiroyuki Kachi
The dollar was weaker against the yen and the euro in Asian trade on Tuesday, with investors locking in profits after a recent rally that drive the greenback to a one-year high.
The dollar was changing hands at Y108.11 around 0450 GMT, after touching a five-month high of Y108.54 overnight. The U.S. currency maintained earlier gains in early trade in Asia, but then lost some luster and eased to Y107.80. That compares with Y108.44 late Monday in New York.
The euro rose to $1.0751 at midday in Asia, from $1.0736 late Monday.
"I don't think the dollar's uptrend will be disrupted easily, but it would not be a surprise to see adjustments after such rapid gains,"said Takuya Kanda, senior researcher at Gaitame.Com Research Institute.
The U.S. currency gained traction in recent trades after Donald Trump's victory at last week's U.S. presidential elections. In anticipation that the Trump administration will boost fiscal spending, the yield on 10-year U.S. Treasurys has been rising, touching 2.3% overnight, its highest intraday level since Dec. 30. The 10-year yield was below 1.9% leading into the U.S. election night.
A boost to fiscal spending could be inflationary and mean more government debt and that has been pushing up U.S. bond yields and making the U.S. currency more attractive to investors seeking higher returns.
On Tuesday, however, the greenback came under selling pressure as profit-taking kicked in after the ICE Dollar Index, which gauges the U.S. currency against a basket of six others, stood at its highest level since last November overnight.
Also, Tuesday is a regular trade settlement day and the dollar weakened in mid-morning trade, suggesting that Japanese exporters' dollar sales may have exceeded importers' purchases.
After nosediving to Y101.19 Wednesday last week in the Asian session hours before Mr. Trump's victory, the U.S. currency has been strengthening rapidly, gaining more than 7% so far this week.
Mr. Kanda said if the U.S. October retail sales later Tuesday disappoint investors, the dollar may fall further to around Y107.00.
The WSJ Dollar Index, a measure of the U.S. dollar against a basket of major currencies, was down 0.10% at 90.30.
In other currency trade pair, the euro was lower at Y116.26 midday from Y116.43.
Interbank Foreign Exchange Rates At 22:50 EST / 0350 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 108.11-12 108.41-42 -0.28108.43 107.80 -10.13
EUR/USD Euro 1.0750-53 1.0735-38 +0.14 1.0773 1.0736 -1.00
GBP/USD U.K. 1.2488-90 1.2491-93 -0.02 1.2526 1.2483 -15.25
USD/CHF Switzerland 0.9970-74 0.9978-82 -0.08 0.9985 0.9948 -0.48
USD/CAD Canada 1.3539-44 1.3558-63 -0.14 1.3563 1.3530 -2.15
AUD/USD Australia 0.7559-63 0.7553-57 +0.08 0.7577 0.7549 +3.76
NZD/USD New Zealand 0.7107-13 0.7114-20 -0.10 0.7140 0.7106 +4.05
EUR/JPY Japan 116.22-26 116.41-45 -0.16 116.45 116.10 -11.12
Source: Tullett Prebon
Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
(END) Dow Jones Newswires
November 15, 2016 00:10 ET (05:10 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.