Yen Higher on Greek Deal Uncertainty but Pares Gains on Stocks Rise

 
   By Hiroyuki Kachi 
 

        The yen strengthened against the dollar and the euro on Greek fears in Asian trade Monday but later pared much of their gains, with another day of stock market advances in China curbing investor appetites for the safe-haven yen.
        Around 0450 GMT, the greenback was at Y122.54, compared with Y122.82 late Friday in New York. But the U.S. currency recouped much of its earlier losses after falling to as low as Y121.95 earlier in the session
        The Japanese currency also gained momentum against the euro, with the common currency falling to Y136.52 from Y137.00 Friday in New York. They compare a low of Y135.02 in early Asia session.
        The euro also fell to $1.1132 from $1.1162 Friday in New York.
        The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.07% at 87.21.
        Yen buying gained traction early on in the Asia session as Greece-related headlines dashed the renewed optimism last week that a deal might be reached at the eurozone crisis summit over the weekend.
        As investors await the third Monday in a row to see weekend developments over Greece's future status in the eurozone, the eurozone edged closer to a new bailout deal for Greece. But a statement prepared by the currency union's finance ministers said negotiations on a new rescue could only start once the Parliament in Athens had passed pension overhauls and sales-tax increases, along with further financial-policy measures by Wednesday.
        "There have been no conclusions on Greece," said Yuji Saito, executive director of the foreign exchange department at Credit Agricole in Tokyo.
        "We keep waiting, but I got the impression the market's sensitivity is gradually fading," said Mr. Saito.
        He said how Chinese stocks perform still demands close attention. But considering the authorities' regulation to arrest the further tumble in the share prices, investors will likely shift their focus to Federal Reserve chairwoman Janet Yellen's testimony to Congress later this week.
        "We would like to pay attention to her stance to go ahead with rate increase despite a slew of uncertainties," said Mr. Saito.
        Ms. Yellen Friday reaffirmed the central bank's plan to start raising short-term U.S. interest rates later this year and highlighted tentative signs that wages are on the rise as the labor market tightens. The comments were the first from the Fed leader since a government debt default in Greece and a stock-market tumble in China raised doubts in financial markets about whether the Fed would stick to its plan to start lifting its benchmark rate from near zero in 2015.
        The Shanghai Composite Index was last trading 2.3% higher. Meanwhile, the benchmark Nikkei Stock Average was up 1.6% midday.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires

        July 13, 2015 01:18 ET (05:18 GMT)

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