By Hiroyuki Kachi
The dollar gained traction against the yen in Asian trade on Friday, ascending again after President Donald Trump's pledge to unveil a tax plan in coming weeks.
The U.S. dollar advanced to Y113.80 in the mid morning trade before slightly falling to Y113.64 around 0450 GMT. That was higher than Y113.25 late Thursday in New York. Meanwhile, the euro was flat at $1.0661 in midday Asia trade from $1.0657.
The WSJ Dollar Index, a measure of the U.S. dollar against a basket of major currencies, was up 0.02% at 91.00.
The greenback was tracking its overnight strength against the yen following Mr. Trump's comments Thursday at a White House meeting with airline executives that he would make an announcement that would be "phenomenal in terms of tax" within the next three weeks.
The comments boosted optimism that lower taxes would encourage consumer spending and business investments, sending the benchmark U.S. 10-yaer Treasury yield and the U.S. stocks higher. In Tokyo, the Nikkei Stock Average was up 2.4% at midday, providing a catalyst to sell the perceived safety of the yen.
The U.S. bond market selloff also reminded investors of a widening gap between U.S. and Japanese yields, prompting Japanese corporate players to buy the dollar for the purpose of commercial trade settlements in the mid-morning session.
But later in the session, the U.S. currency was struggling to rise further as investors were increasingly sitting on the sidelines ahead of the U.S.-Japan summit meeting.
Mr. Trump has accused Japan's car makers of engaging in unfair trade practices, while his complaint about thedollar's strength has also raised worries in Japan that he might do something to drive it down to help U.S. manufacturers compete with the Japanese companies.
"We really have no idea about what's coming out [of the summit]," said Kosuke Hanao, head of FX at HSBC in Tokyo. "But I don't think we'll get a particularly good narrative" from the meeting, said Mr. Hanao.
The upcoming talk would turn out to be reminiscent of the U.S.-Japan summit in the early 1990s. The yen strengthened against the dollar after U.S. President Bill Clinton said "the appreciation of the yen" was one of "three or four things working today, which might give us more results" in trying to boost U.S. exports to Japan. Mr. Clinton made his remarks at a White House press conference with Japanese Prime Minister Kiichi Miyazawa in April 1993.
In other currency trade, the euro was at Y121.17 from Y120.68.
Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMTLatest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 113.63-64 113.26-27 +0.33 113.80 113.22 -2.88
EUR/USD Euro 1.0661-64 1.0655-58 +0.06 1.0670 1.0628 +1.36
GBP/USD U.K. 1.2507-09 1.2495-97 +0.10 1.2522 1.2490 +1.32
USD/CHF Switzerland 1.0013-17 1.0016-20 -0.03 1.0023 1.0010 -1.71
USD/CAD Canada 1.3126-31 1.3144-49 -0.14 1.3150 1.3122 -2.33
AUD/USD Australia 0.7642-46 0.7623-27 +0.25 0.7658 0.7618 +6.14
NZD/USD New Zealand 0.7191-97 0.7183-89 +0.11 0.7207 0.7179 +3.88
EUR/JPY Japan 121.14-18 120.65-69 +0.41 121.34 120.65 -1.58
Source: Tullett Prebon
Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
(END) Dow Jones Newswires
February 10, 201700:43 ET (05:43 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.