Dollar Stable VS Yen On Importers, Despite Weak Japan Stocks

 
   By Takashi Mochizuki 
 

        The dollar was relatively stable against the yen on Wednesday in Asia despite a sharp fall in Japanese stock prices as the nation's importers were heavily bidding the currency.
        As of 0450 GMT, the greenback was at Y101.59, almost unchanged from Y101.67 in New York on Tuesday. Investors had expected the currency to fall more with the Nikkei Stock Average down by 2.4%, which usually translates into risk aversion-driven yen buying.
        Traders say that wasn't the case on Wednesday because Japanese importers, who had been away from the market for close to a week for Japan's Golden Week holiday period, were active in settling their accounts. Speculators, meanwhile, were on the sidelines ahead of Federal Reserve chief Janet Yellen's congressional testimony later in the day.
        The focus is on what type of remarks she will make on the state of U.S. economy and the Fed's monetary policy outlook, especially after recently-released rosy U.S. jobs data.
        "What we will be paying attention to is whether the 10-year Treasury yield will stay above or fall below 2.5%," said Yuji Saito, executive director of foreign exchange at Credit Agricole in Tokyo.
        Meanwhile, the market will also be paying attention to the European Central Bank's policy-setting meeting on Thursday. While the consensus is for no additional easing in May, traders believe the ECB will move in June if the region's prices don't pick up.
        Mitsubishi UFJ Trust and Banking's senior manager Toshihiko Sakai said the euro could rise above $1.40 if the bank indeed stands pat on the policy this week. The pair was at $1.3925, down from $1.3977 from New York. Against the yen, it was at Y141.44 from Y141.76
        Write to Takashi Mochizuki at takashi.mochizuki@wsj.com
        (END) Dow Jones Newswires

        May 07, 2014 01:06 ET (05:06 GMT)