Dollar rising as Nikkei further moves up
By Staff Writer
The greenback is on the rise against Yen, while renewed buying recorded on Tokyo Stock Exchange. Some investors shifted their focus from the traditional safety net of Japanese currency to equities on Tokyo bourse. Investors are keen on the outcome of G-20 meeting this weekend in Shanghai.
US dollar against Yen was at ¥112.28 from ¥111.95 late Wednesday in New York. After reaching its low at ¥111.04 overnight near to recent low of ¥110.98 on 11 February, the US dollar bounced back to above ¥12 after recovery in oil and US stocks.
Market Watch reports that US currency gained momentum in Asian trade as Japan's benchmark Nikkei Stock Average index rose 1.41 percent. Nikkei stretched earlier gains to improve risk sentiment. The increased demand from Japanese importers has also added to the US dollar's strength. As a result, the Japanese currency further weakened.
Tokyo-based dealers observed that the current selling pressure is limiting the rise of US dollar. Investors have been pushing Yen buying as traditional safe harbor in turbulent times. However, global uncertainty, weaker oil price and China's economic slowdown are still affecting the financial markets.
Dollar against Yen was strengthening from ¥113 on Monday to over ¥112 now. It is moving up as gains in Japan, China and other Asian stocks are driving investors to buy greenback against safe haven Yen, as reported by Nikkei Asian Review. However, the Asian markets are in wait and watch mode ahead of G20 meeting.
Minori Uchida, head of Tokyo global markets research at Bank of Tokyo-Mitsubishi UFJ, said "No matter what happens, investors would buy the yen."
Dealers and analysts predict that the G20 meeting may reiterate earlier currency policy commitments. Uchida further said "The dollar barely managed to find a support against the yen as some investors have faint hopes that the G-20 meeting would provide a coordinated action against the ongoing risk-off mood."
Japanese stocks were moving in choppy trading on Thursday, while Yen was trading on weaker note. The rising US dollar is also lifting exporting companies' stocks. The broader Topix gained 1.8 percent to 1,307.54 points while Nikkei rose 1.4 percent to 16,140 on overnight rebound in oil prices, according to The Hindu Business Line.
Shanghai is hosting Group of 20 Finance Ministers meeting on Friday and Saturday. Tokyo-based investors are observing the developments at the G20 meeting as finance ministers and central bankers from advanced and developing nations are gathering in Shanghai. The G20 meeting will also discuss on recent volatility in the global financial markets. If the outcome is not on lines of market expectations, then the US dollar may fall again.