Dollar Softens Against Yen on Stock Weakness

 
   By Hiroyuki Kachi 
 

        The dollar was lower against the yen in quiet Asian trading Tuesday, weighed down by a stock market retreat ahead of the new year holiday season in Japan.
        As of 0450 GMT, the dollar was at Y120.40 from Y120.69 late Monday in New York.
        With fewer institutional and corporate investors in the currency market ahead of the holiday season, the greenback remained largely rangebound with a lack of fresh cues.
        A falloff in the Nikkei Stock Average invited some safe-haven buying of the yen, briefly bringing the dollar down to Y120.36. The benchmark Nikkei index was down 1.1% midday.
        Traders said some U.S. and European investors had come back from their Christmas breaks to start building up fresh dollar-long positions ahead of U.S. economic indicators later this week including the ISM manufacturing index out Friday.
        The dollar's "firm tone (against the yen) will likely persist toward the new year," said Toshiyuki Umekawa, senior vice president of the forex division at Mizuho Bank.
        The currency pair lacks any obvious major trading cues in the immediate future, said Toshihiko Sakai, senior manager of the forex and financial products trading division at Mitsubshi UFJ Trust and Banking Corp. The current exchange rate has been reached largely through effective policy measures by central banks, ranging from the Bank of Japan's surprise easing and the Federal Reserve's stance on an eventual rate increase.
        "I don't think there is any theme," right now in the market, Mr. Sakai said, adding that there are likely "few players in the market bold enough to take on a challenge at the moment." Mr. Sakai said the dollar will likely move in a range between Y119.50 and Y121.50 for the rest of the week.
        Following news of early elections in Greece, the euro remained top heavy and then weakened to $1.2130 -- its lowest level since July 26 2012. Around 0450 GMT, the common currency was at $1.2140 from $1.2154. The snap poll in January was triggered by a third failed vote to appoint a president in a parliamentary vote, fanning fears that a new Greek political upheaval could reignite a long-simmering debt crisis.
        Against the yen, the euro was at Y146.17 from Y146.61.
        The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was down 0.02% at 83.04.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires

        December 30, 2014 00:23 ET (05:23 GMT)

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