Yen Weaker Against Dollar, Euro as Greek Fears Ease

 
   By Hiroyuki Kachi 
 

        The yen was lower against the dollar and the euro in Asian trade Wednesday as diminished worries over the Greek debt situation and a recovery in oil prices strengthened risk sentiment.
        Traders shrugged off comments by Bank of Japan officials and reports of a possible BOJ policy board nomination.
        The greenback briefly hit Y118.00 before stabilizing at Y117.76 around 0450 GMT, compared with Y117.52 late Tuesday in New York. The euro was at Y135.05 from Y134.92. The benchmark Nikkei Stock Average was up 1.9% midday.
        Greece's Finance Minister Yanis Varoufakis said Tuesday that Athens was working on a road map to lessen the burden of his country's hefty debt pile, and he hoped to have an agreement with Greece's creditors by the beginning of June. That's a sign Greece's new government was moving closer in its negotiations with its creditors to easing the terms on its 240 billion-euro bailout.
        Meanwhile, benchmark U.S. oil prices settled Tuesday at $53.05 a barrel, its highest level since Dec. 31, up $3.48, amid signs a global supply glut could ease.
        "The risk averse mood became more relaxed," said Takuya Kanda, senior researcher at Gaitame.Com Research Institute.
        The improved sentiment, especially given receding fears over Greece, caused the euro to rise against both the dollar and the yen, Mr. Kanda said. This causes "a tug-of-war between a weaker dollar and a weaker yen," he added, limiting upward pressure on the dollar against the Japanese currency.
        The euro was at $1.1471 from $1.1482, after surging as high as $1.1534 overnight--its highest level since Jan. 22.
        "The current market mood is unable to give a clear direction to the dollar against the yen," said Mr. Kanda, adding that investors may have to wait until the release of U.S. jobs data scheduled to come out Friday.
        Assuming that diminished risk aversion and upbeat U.S. jobs data co-exist, the dollar may test Y119 later this week, he said, adding that the greenback had downside support at around Y116.50, should that not prove to be the case.
        Currency market participants saw little of trading interest in comments by Bank of Japan Deputy Gov. Kikuo Iwata earlier Wednesday.
        Mr. Iwata called for "patience" for the central bank's stimulus measures to bolster the economy, responding to signs of displeasure among the public over falling real wages and limited growth in full-time employment.
        "It takes a certain length of time for the policy to come into full effect" and push up price-adjusted wages, said Mr. Iwata.
        The market also showed muted reaction to the possible nomination of Waseda University Prof. Yutaka Harada, said Mizuho Securities FX analyst Kenji Yoshii. "The nomination of a reflationist like as Mr. Iwata was almost in line with expectations," he said.
        Despite reports that the government was planning to nominate Mr. Harada in the morning, a a parliamentary committee chairman said the government did not nominate a candidate for the board.
        The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.01% at 85.00.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires

        February 04, 2015 01:02 ET (06:02 GMT)

#FX
#Forex
#YenWeak
#AgainstDollar
#GreekFears