U.S. Dollar Tad Higher Against Yen as Risk Sentiment Improves

By Hiroyuki Kachi

The U.S. dollar was slightly higher against the yen and the euro in Asia trade Tuesday, as a comeback in Asian stocks helped improve risk sentiment.

The dollar was at 119.46 yen in Asia around 0450 GMT, up from Y119.41 late Monday in New York.

The dollar fell as low as Y119.10 earlier in the session, but gained upward momentum and briefly touched Y119.70 after Tokyo and Shanghai stocks rose.

The Nikkei Stock Average was up 0.04% midday, erasing earlier losses of as much as 123 points.

The Shanghai Composite Index last traded 0.4% higher after China’s stock regulator said in a statement it would announce guidelines to regulate selling by major Chinese shareholders. The index opened 3.0% lower.

Expectations that a six-month selling ban for major stakeholders would expire this week sparked heavy selling on Monday, triggering a trading halt that led to a global selloff.

“Although sentiment is not very good, we are seeing a recovery (in the financial markets) as selling didn’t persist,” said Toshihiko Sakai, a senior manager of the foreign exchange and financial products trading division at Mitsubishi UFJ Trust and Banking.

Mr. Sakai said the financial market is likely to shift its focus to U.S. data due Friday to verify whether the Federal Reserve is heading down a gradual tightening path this year. “It wouldn’t be a surprise to see (the dollar) break above” Y120 later this week, he said.

The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was down 0.01% at 90.39.

Interbank Foreign Exchange Rates At 00:50 EST / 0450 GMT

                           Latest       Previous   %Chg    Daily    Daily   %Chg
Dollar Rates                               Close            High      Low  12/31

USD/JPY Japan           119.46-47      119.44-45  +0.02   119.71   119.10  -0.69
EUR/USD Euro            1.0824-27      1.0830-33  -0.06   1.0840   1.0816  -0.32
GBP/USD U.K.            1.4718-20      1.4715-17  +0.02   1.4727   1.4706  -0.12
USD/CHF Switzerland     1.0010-14      1.0019-23  -0.09   1.0037   1.0012  -0.08
USD/CAD Canada          1.3907-12      1.3952-57  -0.32   1.3955   1.3898  +0.51
AUD/USD Australia       0.7203-07      0.7189-93  +0.19   0.7216   0.7175  -1.13
NZD/USD New Zealand     0.6735-41      0.6749-55  -0.21   0.6759   0.6735  -1.39

Euro Rate

EUR/JPY Japan           129.29-33      129.34-38  -0.04   129.50   129.08  -1.13


Source: Tullett Prebon

Write to Hiroyuki Kachi at [email protected]

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  01-05-160044ET
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