The dollar edged
down in Asian trading on Friday, taking a breather from this week's
rally that brought it to its highest levels against the yen since 2002
on growing expectations that the U.S. Federal Reserve would raise
interest rates this year.
Market
participants said the dollar's recent ascent had caught some investors
off guard and their efforts to cover their positions was likely to keep
the dollar supported, even with possible risks from U.S. jobs data at
the end of next week.
"Japanese importers are far behind to cover their exposure, and therefore, on any dip, they've got to buy the dollar," said Kaneo Ogino, director at Global-info Co in Tokyo, a foreign exchange research firm.
"I think even ahead of the U.S. nonfarm payrolls report next week, some want to keep their dollar-long positions," he said.
A warning from Japanese Finance Minister Taro Aso overnight was a factor behind the dollar's move away from Thursday's high of 124.46 yen JPY=, although it remained well above a low of 118.88 yen in mid-May. It last stood at 123.81 yen, down about 0.1 percent on the day
"The current yen weakening in the past few days has been rough. I will closely monitor market moves," Aso told reporters on the sidelines of a gathering of finance ministers and central bank chiefs of the Group of Seven countries in Dresden, Germany.
But Japanese Economics Minister Akira Amari said on Friday the pace of yen declines could not necessarily be described as excessive.
Japanese data released on Friday showed Japan's core consumer prices barely rose and household spending unexpectedly fell in the year to April, casting doubt on the Bank of Japan's view that a steady economic recovery was lifting inflation towards its 2 percent target.
At the Dresden meeting, the head of the International Monetary Fund warned that Greece could fall out of the euro zone as it struggled to sort out its debt problems, which is adding to concern about the patchiness of the global economic recovery.
"Japanese importers are far behind to cover their exposure, and therefore, on any dip, they've got to buy the dollar," said Kaneo Ogino, director at Global-info Co in Tokyo, a foreign exchange research firm.
"I think even ahead of the U.S. nonfarm payrolls report next week, some want to keep their dollar-long positions," he said.
A warning from Japanese Finance Minister Taro Aso overnight was a factor behind the dollar's move away from Thursday's high of 124.46 yen JPY=, although it remained well above a low of 118.88 yen in mid-May. It last stood at 123.81 yen, down about 0.1 percent on the day
"The current yen weakening in the past few days has been rough. I will closely monitor market moves," Aso told reporters on the sidelines of a gathering of finance ministers and central bank chiefs of the Group of Seven countries in Dresden, Germany.
But Japanese Economics Minister Akira Amari said on Friday the pace of yen declines could not necessarily be described as excessive.
Japanese data released on Friday showed Japan's core consumer prices barely rose and household spending unexpectedly fell in the year to April, casting doubt on the Bank of Japan's view that a steady economic recovery was lifting inflation towards its 2 percent target.
At the Dresden meeting, the head of the International Monetary Fund warned that Greece could fall out of the euro zone as it struggled to sort out its debt problems, which is adding to concern about the patchiness of the global economic recovery.
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