Dollar up as buyers return
Published: 9 Jan at 9 AM
The dollar has edged up against the yen as buyers are attracted to the US currency as further monetary easing is expected by the Bank of Japan. Having slipped to 86.83 yen the dollar ended by pulling back 0.3 per cent to 87.38 yen. On Friday the greenback managed its highest position since July 2010 at 88.48 yen.
Credit Agricole’s global foreign exchange strategist, Mitul Kotecha, said dollar buyers were entering the market looking for the dollar/yen dip to pick up. Japanese importers also appeared to be keen on buying the US currency.
Kotecha added that there could be a dollar pullback in the near-term that could see a drop to around 85.90 yen. Following a year-and-a-half high of 115.995 yen on 2 January, the euro rose by 0.3 per cent to 114.19 yen.
The euro and the dollar both came under pressure earlier this week as investors looked to lock in profits following two months of steep gains against the yen. Since last November the dollar has gained close to 12 per cent against the yen hitting a high at the end of last week. Traders currently appear to be taking a breather.
Japanese Prime Minister Shinzo Abe is currently attempting to push through a new policy with the Bank of Japan to stimulate the economy and pull his country out of deflation.