By Hiroyuki Kachi
The dollar was a tad lower against the yen and the euro during Asian trade on Thursday, with profit-taking and selling from Japanese corporate players kicking in to weigh on the U.S. currency's upward momentum.
The greenback was changing hands at Y108.94 around 0450 GMT, after touching a fresh five-month high of Y109.76 overnight. That compared with Y109.06 late Wednesday in New York. The euro rose slightly to $1.0699 at midday in the Asian session from $1.0691 late Wednesday. The common currency touched $1.0666 overnight, its lowest since Dec. 3, 2015.
The WSJ Dollar Index, a measure of the U.S. dollar against a basket of major currencies, was down 0.05% at 90.57."We've been seeing patterns recently in which Japanese exporters sell the dollar during Asian trading hours," after gains overnight on buying from hedge funds and other short-term players, said Akira Moroga, manager of forex products group at Aozora Bank. "That's keeping a lid on [the dollar's] upside," said Mr. Moroga.
The dollar has gained traction recently after Donald Trump's victory in the U.S. presidential election last week, powered by higher U.S. Treasury yields on expectations that the new administration would boost fiscal spending. Such a step could be inflationary and lead to more government debt, pushing up U.S. bond yields. But rising U.S. yields show a signs they are taking a breather.
Still, the dollar quickly advanced in the mid-morning Asian trade to touch an intraday high of Y109.30 shortly after the Bank of Japan surprised the market by offering to buy an unlimited amount of Japanese government bonds at fixed rates, forthe first time since the introduction of its new policy framework.
The move is considered as a sign of concern about recent rises in the JGB yields following the global government bond rout recently. The decision sent the dollar higher, with investors becoming mindful of the widening U.S.-Japan interest rates gap.
But the dollar remained directionless for the rest of the session, with investors largely sitting on the sidelines ahead of U.S. data such as October inflation results and Federal Reserve chairwoman Janet Yellen's testimony later today,
Among other currency pairs, the euro was lower at Y116.50 midday from Y116.62.
Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 108.94-95 109.07-08 -0.12 109.23 108.56 -9.44
EUR/USDEuro 1.0697-700 1.0689-92 +0.07 1.0716 1.0690 -1.49
GBP/USD U.K. 1.2432-34 1.2441-43 -0.07 1.2466 1.2412 -15.63
USD/CHF Switzerland 1.0011-15 1.0018-22 -0.07 1.0028 1.0004 -0.07
USD/CAD Canada 1.3431-36 1.3444-49 -0.10 1.3449 1.3420 -2.93
AUD/USD Australia 0.7475-79 0.7477-81 -0.03 0.7499 0.7467 +2.61
NZD/USD New Zealand 0.7097-103 0.7068-74 +0.41 0.7107 0.7070 +3.91
EUR/JPY Japan 116.53-57 116.58-62 -0.04 116.87 116.26 -10.89
Source: Tullett Prebon
Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
(END) Dow Jones Newswires
November 17, 2016 00:40 ET (05:40 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.