US dollar gains ground against yen


TOKYO, The U.S. dollar rose against the yen in Asia on Thursday, supported by Japanese importers’ purchases following cautious comments by Fed chairman Ben Bernanke on the U.S. jobs situation, dealers said. The U.S. dollar fetched 82.52 yen in Tokyo afternoon trade compared with 82.35 yen in New York late Wednesday. The euro fetched US$1.3698, down from US$1.3727, while staying flat at 113.03 yen. In his congressional testimony on Wednesday, Federal Reserve chief Bernanke warned of continuing weakness in the economy and downplayed inflation threats. He rebuffed criticism that the Fed’s US$600 billion second-stage stimulus program, known as QE2, was unnecessary, noting that unemployment remained high. Bernanke notably said the Federal Reserve would be “exceptionally vigilant” about inflation risks but that it would also consider pumping more money into the economy if necessary. If the economy is “still in a situation where the recovery does not seem to be established and deflation risk remains a concern, then we would have to think about additional measures,” he said.

Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ, said: “The U.S. dollar is in a tight range after the unit was weighed by Bernanke’s comments indicating that the Fed will maintain its quantitative easing stance.” Japanese importers bought the U.S. dollar for their regular settlement, while institutional investors such as life insurers were active in foreign-asset investment on the back of the recent global trend toward higher interest rates. Short-term-focused funds were paying attention to moves in U.S. Treasury yields because if they rise, that would be a cue for investors to increase holdings of the U.S. currency, dealers said. “All we care about when trading the U.S. dollar against the yen is U.S. Treasury yields,” Soichiro Mori, chief strategist at FXOnline Japan, told Dow Jones Newswires. The Australian dollar was little changed at US$1.0100 after data showed job creation in Australia continued to surge in January despite widespread flood devastation in the state of Queensland during the month.

Reaction to Japan’s weaker-than-expected machinery orders data released Thursday was muted. The dollar was mostly higher against regional Asian currencies. It rose to SG$1.2757 from SG$1.2740 on Wednesday, to 1,114.90 Korean won from 1,105.80, to 8,920.00 Indonesian rupiah from 8,918.75, to NT$28.87 from NT$28.77 and to 43.66 Philippine pesos from 43.38.

The greenback edged down to 30.67 Thai baht from 30.71.