Dollar Down Slightly Against Yen, Euro Ahead of U.S. Data

 
   


By Hiroyuki Kachi 
 

        The dollar weakened slightly against the yen and the euro during Asia trade Friday, with investors reluctant to push hard in any direction until they have more clues on whether the Federal Reserve will raise short-term rates in September.
        Around 0450 GMT, the greenback was at Y123.97 from Y124.13 late Thursday in New York. The U.S. currency also fell against the euro, which edged up to $1.0944 midday from $1.0930 in New York overnight.
        The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was down 0.10% at 88.60.
        Having failed to test its upside overnight after the release of U.S. GDP data, the greenback was biased downward during Asia trade, weighed down by dollar selling linked to Japanese exporters' commercial trade settlements at the end of the week and month. The U.S. currency briefly touched Y124.58 in New York overnight, but lost its upward momentum shortly afterward.
        Investors were finding it difficult to take strong positions ahead of a slew of U.S. economic data from an index of U.S. April-June employment costs out later in the day to July jobs data scheduled for release next week.
        "The market still hasn't fully factored in a September rate hike," said Shinichiro Kadota, vice president of research at Barclays in Tokyo. That means there is scope for upside movement, but investors need a full set of strong data before they can fully embrace the likelihood of a September increase, he said.
        Shinji Kureda, head of the FX trading group at Sumitomo Mitsui Banking Corp., said the dollar may continue to inch up against the yen over the short term in the process of slowly factoring in a rate increase. "I have the impression the dollar will gradually ratchet up as a result of a mixture of buying and selling," Mr. Kureda said.
        Investors shrugged off Japanese economic indicators including price data earlier in the morning.
        Inflation in Japan remained unchanged at 0.1% in June, government data showed, with the tumble in energy costs over the past year continuing to keep price changes well away from the central bank's 2% inflation goal.
        In other currency trading, the euro was at Y135.67 midday from Y135.69 overnight.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires
        July 31, 2015 01:35 ET (05:35 GMT)

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