On Wednesday the dollar dipped against the yen in Asian session, with a
bout of yen buying earlier in the morning session after Japan reported
its first monthly trade surplus in nearly three years. The Australian dollar climbed on rising inflation.
The dollar was at ¥119.54, compared with ¥119.65 late Tuesday in New York.
The monthly trade balance came to a surplus of ¥229.3 billion, as plunging oil prices trimmed the value of imports while a weaker yen and the U.S. economic recovery lifted outbound shipments. That was much bigger than the market consensus for a surplus of ¥47.9 billion.
The strength of the Nikkei Stock Average above 20,000-mark also boosted sentiment and became an impulse to push up dollar against the yen. But as the benchmark retreated, the dollar fell as investors sought out the perceived safety of the Japanese currency.
The Nikkei rose 1.0% to 20108.12 midday after registering fresh 15-year high.
The mixture of buying and selling incentives are “acting in an opposing manner,” said Mizuho Securities chief FX strategist Kengo Suzuki.
Still, the dollar remains rangebound, as it is positioned close to a boundary line of ¥119.70 in technical chart that foretells a change in the market trend, he said.
“The market still lacks (decisive) trading cues that help investors jump in buying up (the dollar),” said Suzuki.
Investors are now turning their attention to much more volatile commodity-exposed currencies such as the Australian dollar which strengthened, with a rise in inflation receding expectations for an early interest rate reduction.
Australian consumer prices rose 0.2% in the first quarter from the fourth, and were up 1.3% from a year earlier. That compares with economists consensus for a 0.1% rise on quarter and a 1.3% rise from a year earlier.
The Aussie climbed to as high as $0.7771 from $0.7720 before the release, while the Australian dollar briefly hit its high of ¥93.01 from ¥92.45.
The euro was at $1.0738 from $1.0734, while the common currency was at ¥128.31 from ¥128.46.
