Dollar eases against yen in Asia

December 21, 2009

, TOKYO, Dec 21 – The dollar fell against the yen in Asian trade on Monday as traders locked in recent gains, while heightened concerns about Europe\’s debt woes weighed on the euro, dealers said.

The dollar eased to 90.29 yen in Tokyo afternoon trade from 90.40 in New York late Friday. The euro slipped to 1.4341 dollars from 1.4343 and to 129.48 yen from 129.65.

The dollar was supported against the euro by recent upbeat US economic data that contrasted with gloomy news from Europe, where worries are growing that government debt problems may threaten an economic recovery, dealers said.

"US equities have been rising and the market\’s hopes for a recovery is what has been driving the dollar and caused investors to focus on the greenback," said Chuo Mitsui Trust Bank head of forex Yosuke Hosokawa.

"Investors will be focusing on more economic data. In Europe, compared with the US, there have been more worries over monetary policies or public finances. But at the same time, it\’s not as if all European members are in that situation, so it is hard for investors to find trading cues."

In the US, home sales and durable goods orders are among the economic indicators due to be released this week.

The greenback got a boost in early trade from safe-haven demand due to increased tensions in the Middle East, after Iranian troops occupied an Iraqi oil well in a disputed border area from Friday until Sunday, dealers said.

It was the first serious incident between the two neighbours since the US-led invasion of 2003 that toppled Saddam Hussein, whose forces fought a 1980-1988 war against Iran.

Market players will be looking at Wednesday\’s minutes of the Bank of England\’s most recent policy meeting for any clues on when it will exit its emergency measure of flooding markets with cash, known as quantitative easing.

They largely overlooked fresh data out of Japan showing the world\’s second largest economy logged a trade surplus for a 10th straight month in November, helped by recovering demand from China.

Against Asian currencies, the dollar rose to 1.4034 Singapore dollars from 1.4004 on Friday, to 1,181.75 South Korean won from 1,175.50, to 9,510 Indonesian rupiah from 9,465 and to 32.38 Taiwan dollars from 32.29.

The greenback was steady at 46.65 Philippine pesos and at 33.23 Thai baht.


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