Dollar rises against yen

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The dollar rose against the yen in Asia on Tuesday, with investor sentiment buoyed by another record close on Wall Street and soaring equities in Tokyo.

The greenback bought 104.36 yen in Tokyo morning trade from 104.11 yen in New York Monday afternoon.

The euro fetched 142.83 yen from 142.58 yen while buying $1.3684 against $1.3695.

Stocks jumped after the Dow and S&P 500 closed at all-time highs in New York in response to another set of upbeat consumer data indicating the US economy is getting back on track.

The rises spurred Japanese stocks to rally, with the buoyant sentiment helping to lift the dollar in thin trade ahead of the Christmas holiday season.

The yen usually rises in times of economic uncertainty as it is considered a safe haven but investors tend to abandon it when the outlook is rosy, instead buying up riskier assets such as stocks.

Tokyo's benchmark Nikkei stock index was up 0.86 percent in midmorning trade to top 16,000 for the fist time in six years.

“The yen is weakening in response to the strong Nikkei,” Daisaku Ueno, senior forex strategist at Mitsubishi UFJ Morgan Stanley, told Dow Jones Newswires.

The dollar also got support from the Federal Reserve's decision to start rolling back its massive stimulus package in January.

Considering the Fed decision and expectations that Japan's easy policy will continue for the time being, the dollar “will generally be in an upward trend, with occasional positions adjustments kicking in”, Ueno said.

Currency rates hardly moved after the Japanese government adopted a record $922 billion budget for the next fiscal year from April. - AFP


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