Dollar rises against the yenComment on this story
Tokyo - The dollar and euro rose against the yen in Asia on Tuesday as investors bet Japan's public pension fund, the world's biggest, will start to shift some of its holdings into foreign assets.
In afternoon Tokyo trade, the greenback rose to 101.97 yen from 101.84 yen in New York, although its gains were capped ahead of a Federal Reserve policy meeting and owing to investor jitters over the growing unrest in Iraq, which has sent oil prices soaring.
The euro also rose to 138.27 yen from 138.20 yen, while it weakened to $1.3560 from $1.3570 in New York.
Dealers said the dollar was gaining support from expectations that Japan's $1.26 trillion public pension fund would soon shift more of its bond-heavy assets.
Dumping low-yield sovereign bonds in search of higher, but riskier returns, could see cash flood global markets, boosting equities and demand for riskier currencies such as the greenback and euro.
The move could also see other Japanese pension funds follow suit, said Daisaku Ueno, chief foreign exchange strategist at Mitsubishi UFJ Morgan Stanley.
However, the market mood was weighed by concerns over Iraq as militants sweep across the country, taking over key cities and heading for Baghdad.
On Monday the jihadists battled government forces for control of a strategic northern town, while US officials considered using drone strikes against the rebels.
The dollar was stronger against other Asia-Pacific units, rising to Sg$1.2527 from Sg$1.2504 on Monday, to 1,022.55 South Korean won from 1,019.59 won and to 43.96 Philippine pesos from 43.86 pesos.
It also strengthened to 11,872.80 Indonesian rupiah from 11,817 rupiah, to 60.38 Indian rupees from 59.99 rupees, to 32.45 Thai baht from 32.36 baht, and to Tw$30.02 from Tw$30.00.
The Australian dollar weakened to 93.59 US cents from 94.03 cents, while the Chinese yuan changed hands at 16.36 yen against 16.38 yen. - AFP