Yen Takes A Breather After Recent Weakness

   By Alexander Martin

        The yen edged higher against the dollar during Asian trading Tuesday as investors adjusted their positions following the currency's recent weakness.

        The dollar sunk to Y117.78 after climbing as high as Y118.59 earlier in the morning. As of 0350 GMT it was at Y117.94 from Y118.27 late New York trading Monday.

        On Tuesday, the Bank of Japan released minutes from its Oct. 31 meeting, when the central bank surprised markets by unleashing further easing measures. The minutes said one member expressed concern about the adverse effects of the weaker yen on smaller firms.

        BOJ Gov. Haruhiko Kuroda also touched on the subject during a speech, saying the weaker yen had both positive and negative implications for the economy. Analysts said the comments may indicate Mr. Kuroda adopting a more cautious stance on the impact of yen weakness.

        The yen's weakness has become a major topic of global debate. Last Friday, Japan's Finance Minister Taro Aso said the recent yen weakness was "too fast," comments that made the currency jump.

        "All this combined may be weighing on the pair, although its upward trend is still very much intact," said Minori Uchida, chief currency analyst at the Bank of Tokyo-Mitsubishi UFJ.

        Daisaku Ueno, chief foreign-exchange strategist at Mitsubishi UFJ Morgan Stanley, said investors were also likely to be adjusting their positions ahead of the Thanksgiving holiday.

        "With the holiday coming up, now's not really the time to be taking large bets," he said.

        Analysts appear to agree that the yen was likely to weaken further.

        Osamu Takashima, chief FX strategist at Citigroup Global Markets Japan, said the dollar could climb above the Y120 level in the coming days. "The pair's upper target has already been expanded to the Y120 level, and the upper bollinger band is at around Y120.90," he said.

        The euro was at $1.2422 from $1.2441 and at Y146.52 from Y147.15.

        Write to Alexander Martin at alexander.martin@wsj.com

        (END) Dow Jones Newswires

        November 24, 2014 23:16 ET (04:16 GMT)

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