By Hiroyuki Kachi
The dollar inched up against the yen, coming closer to hitting
its year high in Asian trade Monday, with the greenback extending
its gains following upbeat U.S. inflation data and comments by
Federal Reserve Chairwoman Janet Yellen Friday.
The U.S. currency touched as high as Y121.78 before slightly
weakening to Y121.67 around 0250 GMT. That is higher compared with
Y121.55 late Friday in New York.
Getting a boost from upbeat U.S. inflation and Ms. Yellen's
remarks, the dollar's uptick to its year high of Y122.04 set on
March 10 has now come into sight.
U.S. core inflation in April, excluding volatile food and energy
prices, showed the biggest gain since January 2013, while Mr.
Yellen said the central bank is on track to raise interest rates
sometime this year.
A solid gain in the Nikkei Stock Average gave a support to the
dollar by allowing selling of the yen, perceived as a safe asset.
The benchmark index rose 0.7% midday.
But investors found it difficult to make any major moves, with
many overseas investors away on holiday and a lack of fresh trading
cues. Financial markets are closed elsewhere in the world including
the U.S. for Memorial Day and the U.K. for Spring Bank Holiday.
"Investors were scared of heights," when the dollar hit its year
high in March, said Daisaku Ueno, chief FX strategist at Mitsubishi
UFJ Morgan Stanley.
But after confirming solid downside support around Y118 and
Y119, later in the year and then with "investors' eyes accustomed
to stay around Y120" in recent session, the dollar is now
positioned better to try its upside against the yen, said Mr.
Ueno.
Investors showed a muted reaction to Japan's merchandise trade
balance for April released earlier Monday by the government.
A month after its first surplus in nearly three years, the
world's third largest economy logged a Y53.4 billion deficit.
The euro was at $1.0988 from $1.1017, while the common currency
was at Y133.68 from Y133.83.
The WSJ Dollar Index, a measure of the dollar against a basket
of major currencies, was up 0.12% at 86.31.
Interbank Foreign Exchange Rates At 22:50 EST / 0250 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 121.67-68 121.56-57 +0.09 121.79 121.56 +1.63
EUR/USD Euro 1.0985-88 1.1013-16 -0.25 1.1015 1.0972 -9.19
GBP/USD U.K. 1.5476-78 1.5488-90 -0.08 1.5489 1.5464 -0.65
USD/CHF Switzerland 0.9426-30 0.9427-31 -0.01 0.9452 0.9428 -5.18
USD/CAD Canada 1.2289-94 1.2278-83 +0.09 1.2308 1.2281 +5.77
AUD/USD Australia 0.7821-25 0.7823-27 -0.03 0.7825 0.7803 -4.26
NZD/USD New Zealand 0.7300-06 0.7304-10 -0.05 0.7307 0.7292 -6.31
Euro Rate
EUR/JPY Japan 133.66-70 133.82-86 -0.12 133.84 133.56 -7.77
Source: ICAP PLC
Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com