Dollar Flat Against Yen, Euro Ahead of Book Closing

 
   By Hiroyuki Kachi 
 

        The dollar was essentially flat against the yen and the euro, as investors remained cautious and avoided taking strong, lopsided positions ahead of the March 31 end of the Japanese fiscal year.
        Around 0450 GMT, the dollar was at Y119.16, compared with Y119.18 late Thursday in New York. Meanwhile, the euro was at $1.0886 from $1.0885.
        Tensions in the Middle East, stemming from Saudi Arabia and its allies' launch of a military campaign in neighboring Yemen, seemed to have eased.
        But the greenback has found itself top heavy during Asian trade, as investors remain cautious about possible turbulence that could drag down the dollar again the yen ahead of the book closing.
        Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley, said dollar selling pressure could emerge in the form of position adjustments by short-term players or repatriation of profits by Japanese corporate investors or financial institutions.
        "Basically, that may make the topside heavier and the downside softer," said Mr. Ueno, adding that investors "can't let down their guard over a higher yen until the New York closing Tuesday next week."
        "At a time when many remain uncertain about what kind of turbulence is going on ahead of the end of the term, there will be few investors trying to test upside," said Mr. Ueno. Rather, investors are more likely to wait until the release of the upcoming U.S. jobs data scheduled to come out April 3.
        Still, Mr. Ueno said he expects dip-buying bids around the lower half of Y118, making downside limited.
        Fears about the dollar's downside against the yen have receded partly because fears about the Yemen crisis didn't heat up, but "it's premature to conclude that sentiment has turned bullish," said Takuya Kanda, senior researcher at Gaitame.Com Research Institute in a note.
        Mr. Kanda, however, said upside resistance points on technical charts lie at around Y119.90, Y120.15 and Y120.40.
        Currency markets had a muted reaction to Japan's economic data earlier Friday.
        Government data released Friday showed that the on-year growth in the core consumer price index--stripping out volatile fresh-food prices and an increase in the sales tax last year--slid to zero in February, its lowest level in nearly two years.
        Investors now await speech by Federal Reserve Chairwoman Janet Yellen and U.S. gross domestic product data later Friday.
        Among other currency pairs, the common currency was at Y129.74 from Y129.75.
        The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.02% at 81.97.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires

        March 27, 2015 01:19 ET (05:19 GMT)

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