Dollar Little-Changed Against Yen After Abe's Big Election Win

 
   By Hiroyuki Kachi 
 

        The dollar was little-changed against the yen in Asia trade Monday, after fluctuating in a relatively wide band with the upside capped on profit-taking after Sunday's parliamentary election in Japan, and the downside well-supported on dip-buying.
        As of 0450 GMT, the dollar was at Y118.69 from Y118.65 late Friday in New York. The greenback see-sawed during the Asia session.
        The U.S. currency strengthened to as high as Y119.13 in early Asia trade on the results of the election, in which Prime Minister Shinzo Abe scored a decisive victory giving him up to four more years in office and the opportunity to carry on with his "Abenomics" pro-growth strategy, favoring a weaker yen.
        But the dollar then fell as low as Y117.78 on profit-taking in a sign of how the market has shifted its attention from the election results, which were almost in line with expectations. The election didn't offer a clear direction to the dollar-yen pair, said Mizuho Securities chief FX strategist Kengo Suzuki.
        The market remained in risk-aversion mode, with the benchmark Nikkei Stock Average losing about 1.3% as of midday amid falling oil prices.
        Later in the morning, however, the dollar re-tested its upside to breach Y119 again on dip-buying by Japanese importers related to commercial trade settlement, said a Japanese bank dealer. But the dealer said the upswing was exaggerated by the relatively large number of buy orders amid thin volume, with fewer participants ahead of the holiday season.
        Mizuho's Mr. Suzuki said he doesn't think the dollar will show clear direction, or make any big moves, ahead of the closely watched U.S. Federal Open Market Committee meeting scheduled for Dec. 16-17. Until then, the dollar will likely move in a tight technical range between Y117.85 and Y119.65, he said.
        The dollar showed muted reaction to the Bank of Japan's quarterly tankan poll of over 10,000 companies showing that the index measuring the mood of big manufacturers was at plus 12, down one point from the previous survey in September.
        The figure is calculated by subtracting the percentage of respondents saying business conditions are bad from those saying they are good. The result was slightly lower than the median forecast of plus 13 given by 16 economists polled by The Wall Street Journal.
        In other currency trading, the euro was at $1.2443 from $1.2454 and at Y147.67 from Y147.74.
        The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.04% at 81.75.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires

        December 15, 2014 00:21 ET (05:21 GMT)

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