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Dollar rises in Asia on upbeat sentiment

Dollar rises in Asia on upbeat sentiment/AFP

Dollar rises in Asia on upbeat sentiment/AFP

TOKYO, July 1- The dollar edged up in Asia Tuesday as gains in Tokyo stocks boosted sentiment, but lower US bond yields kept the unit under the 102-yen level, analysts said.

In Tokyo afternoon trade, the greenback climbed to 101.42 yen, up from 101.31 yen in New York Monday afternoon.

The euro slipped to $1.3685 from $1.3694 while it bought 138.78 yen against 138.73 yen.

The dollar’s rise came as Tokyo’s benchmark Nikkei stock index gained more than one percent in morning trade.

Investors were heartened by upbeat capital spending plans by Japanese companies seen in the Bank of Japan’s quarterly Tankan survey — although overall sentiment sagged from a more than six year high in the first quarter as an April sales tax hike weighed on activity.

On Monday, the dollar fell as a better than expected surge in US pending home sales in May was offset by a slowdown in economic activity in the Chicago region, putting an end to two months of gains.

Daisuke Karakama, market economist at Mizuho Bank, said lower US bond yields held back the dollar’s gains Tuesday.

“The dollar may have edged up this morning but it’s not bullish,” he said.

“The basic trend is that recent poor US (economic) data led to bond buying, lowering yields.”

Investors are closely monitoring US manufacturing data for June due out later Tuesday, Junichi Ishikawa, market analyst at IG Securities, told Dow Jones Newswires.

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If the index shows improvement in economic fundamentals, the dollar is likely to gain although a weak report could help pull it below 101 yen, he said.

The euro was mixed as fresh data showed eurozone inflation was 0.5 percent in June — the same level as in May.

That marked the lowest inflation level since the financial crisis of 2008-2009 nearly froze the market on which banks lend to each other and caused recession in several advanced economies.

The European Central Bank is so concerned that prices could start falling it has cut its interest rates into negative territory in the hope of boosting lending and pushing inflation back to the bank’s target of nearly 2.0 percent.

The dollar was mixed against other Asia Pacific currencies.

It inched up to Tw$29.88 from Tw$29.86 Monday, to 43.63 Philippine pesos from 43.62 pesos, and to 60.14 Indian rupees from 60.04 rupees,

The dollar fell to 11,872.50 Indonesian rupiah from 11,942.50 rupiah and to Sg$1.2467 from Sg$1.2490.

The greenback eased to 1,011.70 South Korean won from 1,012.17 won, and to 32.41 Thai baht from 32.45 baht.

The Australian dollar firmed to 94.52 US cents from 94.22 cents, while the Chinese yuan traded at 16.32 yen against 16.33 yen.

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