TOKYO: – The dollar was mixed in Asia on Thursday, after taking a hit in New York as dealers shifted to safer investments such as US government bonds.
The greenback climbed to 118.15 yen in Tokyo midday trade, 117.85 yen in New York but still sharply down from 118.88 yen in Tokyo earlier Wednesday. The US unit had touched a seven-year high of 121.84 Monday.
The euro rose to $1.2459 and 147.18 yen from $1.2446 and 146.68 yen in US trade.
Stock markets across the globe closed lower for a second day on Wednesday as energy companies were hammered by plunging oil prices.
With risk aversion prevailing, the yen, considered a haven in times of turmoil, rebounded against the dollar over recent days, while US Treasuries have also risen, leading to lower yields — linked to interest rates — and crimping demand for dollars.
However, the dollar edged up against the yen Thursday, helping Tokyo stocks trim early losses, said Daisuke Karakama, head of forex spot trading at Mizuho Bank.
Tokyo’s Nikkei stock index was down more than two percent soon after opening but clawed some of that back on dip buying to end the morning 0.95 percent lower.
But Karakama said the yen could soon pick up again in the short-term.
“Considering it had lost more than 10 yen (to the dollar over the past month), a correction by 3-4 yen to bring the dollar to the 117 or 116 yen range will be fully possible,” he said.
Political uncertainty in Greece — after the government called a snap presidential election for next Wednesday — has not hurt the euro much, he added.
“The news on Greece drew much attention, but it has not led to euro selling,” he said, arguing there were no serious worries that bringing forward the poll would trigger another bout of eurozone turmoil.
Eyes are now on the European Central Bank Thursday as it makes available cheap short-term loans to banks in the hope they will pass them on to businesses, he said.
“Weak demand (from banks) could trigger euro selling against the dollar,” he said.