By Hiroyuki Kachi
The dollar was slightly lower against the yen during Asia trade Wednesday as investors opted to lock in profits after the U.S. currency struggled to test its upside.
The dollar slipped to Y112.04 before climbing back to Y112.22 around 0450 GMT, compared with Y112.36 late Tuesday in New York.
The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was down 0.01% at 90.77. The euro was flat at $1.0679 in midday Asia trade from $1.0683.
The U.S. currency gained momentum against the yen in mid-morning trade as the benchmark 10-year Japanese government bond yield ratcheted down after the Bank of Japan offered to buy Y450 billion ($4 billion) of debt maturing in five to 10 years.
However, "the dollar was struggling on its upside," said Yuzo Sakai, manager of foreign-exchange business promotion at Tokyo Forex & Ueda Harlow. The central bank's bond purchase offer was unexpected but the amount, unchanged from the previous offer Monday, wasn't strong enough to further stoke investors' appetite for selling yen, Mr. Sakai said.
In addition, lower U.S. yields during the Asia trade and weaker Tokyo stocks prompted investors to book profits, he said. The Nikkei Stock Average was up a moderate 0.2% midday after falling as much as 0.2% in morning trade.
Investors were largely taking a wait-and-see stance before Prime Minister Shinzo Abe travels to Washington this week to meet with President Donald Trump.
Mr. Trump's complaints about the dollar's strength have raised concerns among investors that he might try to drive it down to help U.S. manufacturers compete withtheir Japanese counterparts.
According to U.S. Commerce Department data released Tuesday, the U.S. posted a $68.9 billion goods trade deficit with Japan in 2016. The country was the second-biggest contributor to the overall U.S. goods trade deficit, after China.
Nomura Securities chief foreign-exchange strategist Yunosuke Ikeda wrote in a note that investors "should not overreact" to the data. He said Japan's contribution to the total U.S. deficit was 9.4% last year, down from 10.6% in 2012, when the dollar was mostly below Y85--undercutting the argument that Japan is enjoying a trade surplus against the U.S. with support from a weaker yen.
In other currency trade, the euro was at Y119.87, compared with Y120.08.
Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31USD/JPY Japan 112.23-24 112.40-41 -0.15 112.54 112.04 -4.08
EUR/USD Euro 1.0679-82 1.0682-85 -0.03 1.0692 1.0668 +1.53
GBP/USD U.K. 1.2498-500 1.2509-11 -0.09 1.2517 1.2477 +1.25
USD/CHF Switzerland 0.9974-78 0.9974-78 0.00 0.9987 0.9967 -2.09
USD/CAD Canada 1.3174-79 1.3184-89 -0.08 1.3202 1.3171 -1.97
AUD/USD Australia 0.7629-33 0.7625-29 +0.05 0.7641 0.7611 +5.96
NZD/USD New Zealand 0.7294-300 0.7298-304 -0.05 0.7318 0.7285 +5.37
EUR/JPY Japan 119.85-89 120.04-08 -0.16 120.11 119.74 -2.62
Source: Tullett Prebon
Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
(END) Dow Jones Newswires
February 08, 2017 00:54 ET (05:54 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.