Dollar dips on Fed concernComment on this story
Tokyo - The dollar fell below 102 yen in Asia on Friday on speculation that the Federal Reserve could shift its tapering policy if recent weak data is a sign of a fundamental change in growth.
The dollar slipped to 101.77 yen in Tokyo midday trade from 102.15 yen in New York on Thursday afternoon.
The euro bought 139.48 against 140.05 yen while sitting at $1.3703 compared with $1.3710.
Fed chief Janet Yellen told the Senate Banking Committee that policymakers believe severe weather was behind some of the disappointing numbers of the past two months on job creation, industrial production and consumption.
However, she said they would be keeping a close eye on the economy to see if the weak figures continue, which could lead to a slower pace of cuts to the stimulus programme.
“What we need to do and will be doing in the weeks ahead is to try to get a firmer handle on exactly how much of that set of soft data can be explained by weather and what portion, if any, is due to softer outlook,” she said.
Analysts said Yellen's hint that the taper could be flexible, and her stronger statement that unemployment remains a big problem, suggests less of a determination to push ahead with policy tightening than was evident a few months ago.
“In truth, her remarks fall into the category of 'The Fed will do its job',” National Australia Bank wrote.
“But clearly some detected signs of less than 100 percent commitment to maintain the pace of tapering at the (March 20 policy meeting), even though the Fed chairwoman reiterated that a change in the tapering schedule requires a 'significant' outlook change,” the bank said.
The dollar-selling sentiment also came after Japanese exporters locked in their earnings overseas, dealers say.
“Some exporters which had taken a wait-and-see stance in the hope of the dollar's rally above 102.50 are selling dollars amid an absence of such a chance,” says a dealer at a Japanese bank.
Still, the downside remains solid at 101.50 yen as importers are constantly buying on dips, the dealer told Dow Jones Newswires. - AFP