Tokyo - The dollar moved higher against the yen in Asian trading on Wednesday, adding to the previous day's rally, as dealers welcomed diplomatic efforts to solve the Syrian crisis without military action.
The greenback fetched 100.49 yen in afternoon Tokyo trade, against 100.40 yen in New York on Tuesday and well up from 99.60 yen in Asia on Tuesday.
The euro bought $1.3250, compared with $1.3266, while it weakened to 133.10 yen from 133.29 yen.
US President Barack Obama said late on Tuesday in Washington he would give diplomacy a chance before launching an attack on Syria for using chemical weapons on its own people last month.
The Assad regime earlier in the day agreed to a proposal by Russia to “place the chemical weapons under international control and then have them destroyed”.
Obama has asked Congress to delay a vote on carrying out a strike while diplomatic channels are explored.
The developments have helped boost confidence and risk sentiment, keeping the dollar buoyant against the Japanese unit, which is considered a safer bet in times of uncertainty, dealers said.
“Factors that made us concerned are gradually being removed,” Atsushi Hirano, head of forex sales in Japan at Royal Bank of Scotland, told Dow Jones Newswires.
“(The dollar/yen rate) may extend its gains a little further,” he added.
Upbeat Chinese data has also raised hopes over the health of the Asian economic giant while the euro won support as dealers said there was little chance the European Central Bank (ECB) would further loosen policy in the near future. Monetary easing tends to weigh on a currency.
“Despite recent ECB rhetoric to the contrary, we perceive there exists little scope for policy intervention any time soon,” Credit Agricole said.
“Acknowledging these ECB policy constraints, investors are likely to keep European rate expectations elevated in coming months.”
The dollar was mixed against other Asia-Pacific currencies.
The US unit strengthened to Sg$1.2699 from Sg$1.2690 the previous day, to 32.14 Thai baht from 32.11 baht and to Tw$29.78 from Tw$29.66.
The dollar also rose to 11,412 Indonesian rupiah from 11,323 rupiah and to 1,087 South Korean won from 1,085 won. It slipped to 63.87 Indian rupees from 64.16 rupees and to 43.86 Philippine pesos from 43.92 pesos.
The Australian dollar rose to 92.87 US cents from 92.63 cents, keeping its uptrend after a conservative election win at the weekend.
The Chinese yuan edged down to 16.41 yen from 16.25 yen. - AFP