On Friday the greenback edged lower against the yen in Asia
trade, with some investors locking in profits in the wake of this week’s high-profile rally.
The dollar was at 123.77 level, compared with 123.95 late Thursday in New York.
The greenback found support around ¥123.60 midday. But the level was still much higher than the ¥121.50 mark it was hovering around at the start of the week. At one point in the rally, the dollar touched ¥124.46, its highest since Dec. 5, 2002.
A slight correction like this will be good for the dollar before
its tries to push upward again toward ¥125 next week, analysts say.
The dollar’s upside was already limited overnight, following comments by Japanese finance minister Taro Aso, who told reporters at a Group of Seven meeting in Germany that recent yen moves were “rough.”
Weaker stocks elsewhere in Asia, data showing Japan’s inflation slid back to zero and moves to offload dollars by exporters were among other factors putting selling pressure on the greenback.
But the dollar’s solid downside support suggests appetite remains strong among Japanese institutional and corporate investors to buy the dollar on dips.
Investors now await U.S. economic data including revised gross domestic product data out later Friday to see if the economy actually contracted in the January-March quarter.
Traders are widely speculating that the dollar will rise further if expectations of diverging monetary policy in the U.S. and Japan continue to grow.
