By Hiroyuki Kachi
The dollar was lower against the yen in Asia trade Thursday, as
investors moved to lock in profits after the greenback staged a
rally following the outcome of the Federal Open Market
Committee.
As of 0550 GMT, the dollar was at Y118.43 from Y118.70 late
Wednesday in New York.
Earlier in the session, the greenback rose to as high as
Y119.01, following on from the overnight rally after the FOMC
meeting.
The Federal Reserve said it would be patient about raising
short-term interest rates. Fed Chairwoman Janet Yellen said the
central bank was unlikely to raise rates for the "next couple of
meetings," signaling a timeline for the eventual increase in U.S.
interest rates at its April 2015 meeting at the earliest.
But the dollar remained top heavy for the rest of the session in
a sign of how investors still feel uneasy about underlying negative
factors such as weakness in oil prices and the Russian ruble that
have generated risk aversion in global financial markets.
"The situation still hasn't fully opened up for risk-taking,"
said Minori Uchida, head of Tokyo global market research at Bank of
Tokyo-Mitsubishi UFJ.
Mr. Uchida said investors still have the impression that the
dollar's recent rally has been "a bit excessive," while the latest
FOMC outcome indicated that any rises in interest rates down the
line are likely to be at a considerably moderate pace.
Against that backdrop, Japanese market participants such as
importers see the dollar as overpriced at its current value around
the Y118 level, Mr. Uchida said. The Bank of Japan's Tankan
business sentiment survey released earlier this week showed that
big manufacturing companies have been operating on the assumption
that the dollar will average Y103.36 this fiscal year ending
March.
"The level above Y119 is a selling zone" for profit taking, Mr.
Uchida said.
In other currency trading, the euro was at $1.2344 from $1.2342,
while the common currency was at Y146.23 from Y146.49.
Junichi Ishikawa, market analyst at IG Securities, said the euro
may fall below $1.2300, given the diverging monetary policies of
the eurozone and the U.S. and the advance in U.S. stocks, a move
leading to an uptick in U.S. Treasury yields.
The Wall Street Journal reported the European Central Bank
executive board member Benoît Coeuré saying that the eurozone's
central bank was closer to launching a large-scale asset purchase
program focused on government bonds.
The WSJ Dollar Index, a measure of the dollar against a basket
of major currencies, was down 0.19% at 82.20.
Interbank Foreign Exchange Rates At 00:50 EST / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
2150 GMT High Low 12/31
Dollar Rates
USD/JPY Japan 118.43-44 118.63-64 -0.17 119.01 118.34 +12.46
EUR/USD Euro 1.2343-46 1.2342-45 +0.01 1.2353 1.2322 -10.16
GBP/USD U.K. 1.5586-91 1.5574-79 +0.08 1.5596 1.5563 -5.86
USD/CHF Switzerland 0.9727-31 0.9728-32 -0.01 0.9748 0.9722 +8.95
USD/CAD Canada 1.1634-39 1.1629-34 +0.04 1.1650 1.1626 +9.57
AUD/USD Australia 0.8133-37 0.8121-25 +0.15 0.8163 0.8117 -8.78
NZD/USD New Zealand 0.7712-18 0.7701-07 +0.14 0.7733 0.7681 -6.15
Euro Rate
EUR/JPY Japan 146.17-21 146.41-45 -0.16 146.75 146.08 +0.97
Source: ICAP PLC
Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com