Yen languishes, eyes on equities and US data

Written by:
Subscribe to Oneindia News

Tokyo, Oct 24: The yen was steady on Wednesday but stuck near overnight lows against the dollar and euro, as gains in U.S. share prices rekindled risk appetite and fuelled a pick-up in carry trades.

The rise in risk appetite lent support to high-yielding currencies such as the New Zealand and Australian dollars, which clung to their gains after rallying the previous day against both the U.S. dollar and the yen.

The dollar hovered near the previous day's lows against the euro, weighed down by market expectations for the Federal Reserve to cut interest rates further this year and for the European Central Bank to keep rates steady.

''I think Asian equities will probably move in positive territory after the gains in U.S. shares. That will probably hurt the yen on the crosses,'' said Hiroshi Yoshida, a forex trader at Shinkin Central Bank.

But the yen's losses could be limited by caution ahead of data on U.S. existing home sales later this session, traders said.

The yen could gain a boost from position unwinding if the housing data were to come in worse than expected and dent U.S.

equities, Yoshida said.

The dollar was steady from late U.S. trading on Tuesday at 114.88 yen as of 0029 GMT, having pulled away from a six-week low of 113.25 yen hit on electronic trading platform EBS on Monday.

The euro was little changed at $1.4255 and 163.74 yen The euro hit a record high of $1.4349 on EBS on Monday. On the stock market, Japanese share prices edged higher in early trade, with the Nikkei share average gaining roughly 0.4% The Australian dollar was steady at $0.8976 clinging to its gains after rising 1.3 percent against the dollar on Tuesday.

A focal point for the Aussie is Australia's consumer price index report for the third quarter, due at 0130 GMT.

Analysts expect underlying inflation, which is what policymakers focus on, to rise 0.8 percent, and anything higher could cement market expectations for the Reserve Bank of Australia to raise interest rates in November.


Please Wait while comments are loading...