********** Asia Forex:Dollar Tests Downside Against Yen; Exporters Sell
TOKYO -(Dow Jones)- The dollar slipped further against the yen in Asia Thursday, as Japanese exporters pushed it to the lower end of its recent range. The dollar traded as low as Y129.33 at 0019 GMT, just before the Tokyo fixing when local banks determine exchange rates for customers. The U.S. currency hadn't traded that low since March 18.
Overseas institutions bought on dips and provided some support, but the dollar remained under selling pressure for much of the session.
"No one wants to be dollar-long ahead of the long Golden Week holiday, because they fear the downside risk more than the upside now," said one Japanese bank trader.
While market participants still generally perceive Y130-Y135 as Tokyo's " comfort zone" for the dollar, the Ministry of Finance clearly doesn't see Y130 as a line worth defending with intervention. The dollar has been dipping below that level every day since late last week.
But its clear the Finance Ministry doesn't want the yen to keep strengthening.
"Our outlook for a strong economic recovery in the U.S. is unchanged. Japan's economy appears to be bottoming. But overall fundamentals show there's no reason for the yen to rise," said Zembei Mizoguchi, the head of the ministry's International Bureau.
Traders are now pondering where the dollar's near-term downside might lie.
"I don't think MOF likes to see the yen strengthening, and I think it's possible they would intervene ahead of last month's Y126.36 dollar low," said Toru Umemoto, foreign exchange strategist at Morgan Stanley in Tokyo.
At 0515 GMT (0:15 a.m. EST), the dollar was quoted at Y129.44 below Y129.64 in New York and Y130.28 in Tokyo late Wednesday.
The euro was at $0.8924, slightly higher than $0.8921 in New York, and above $ 0.8886 in Tokyo. Against the yen, the euro was quoted at Y115.51, compared with Y115.65 in New York and Y115.78 in Tokyo Wednesday.
Sterling was at $1.4494, up from $1.4481 in New York and $1.4477 in Tokyo Wednesday.
(This story was originally published by Dow Jones Newswires)
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S Korea Fin Min:Rapid Won Move In Short Term Undesirable
SEOUL -(Dow Jones)- A rapid movement in the U.S. dollar/Korean won exchange rate in the short term is "undesirable," South Korea's Ministry of Finance and Economy said, following the local currency's sharp appreciation Thursday. "The Korean government is closely monitoring the foreign exchange market and may take appropriate steps if necessary," the ministry's statement said.
At 0716 GMT (3:16 a.m. EDT), the U.S. dollar was trading at KRW1,298.1, down KRW8.9 from Wednesday's close.
Forex - Dollar lower in midmorning Tokyo as US loses lustre
TOKYO (AFX-ASIA) - The dollar was lower in midmorning trade, continuing overnight weakness, on expectations global investors are slowly shifting out of the US on disappointment over the performance of its economy and markets, dealers said.
Weak data overnight provided the catalyst for a further drop in the dollar, which had already disappointed many by failing, along with Wall Street, to capitalise on the ongoing mild economic recovery in the US.
"There is a general dollar depreciation against many currencies caused by the US durable goods orders data, which was weaker than expectations, while stock prices are still falling," said Koji Fukaya, chief analyst at Bank of Tokyo-Mitsubishi.
"The risk for the global economy is rising so many are no longer seeking capital gains in stockmarkets but high interest rates such as seen in the Australian and Canadian dollars, and also the euro," he said.
Fukaya noted that foreign investors have made net purchases of Japanese stocks from the start of April, helping to support the local stockmarket and the yen.
"The neutralisation of (pro-US) positions on the investor side due to the unforseeable future of the global economy is causing people to buy back Asian, and especially Japanese, stocks rather than US stocks," he said.
Japanese stockmarket indices were higher this morning despite falls on Wall Street overnight as a result of earnings concerns.
"In the long-term it's difficult for the Japanese economy to survive without the US economy but at this point currencies are being moved by global investors," Fukaya said.
The dollar continues to look weak technically, with 128.50 yen a key support point and 126 yen "the worst case scenario," he added.
Tokyo 9.15 am New York 3.48 pm London 4.44 pm
Dollar
yen 129.35 down from 129.65 129.70
sfr 1.6422 down from 1.6432 1.6430
Euro
usd 0.8926 up from 0.8925 0.8920
stg 0.6160 down from 0.6163 0.6158
yen 115.45 down from 115.72 115.68
sfr 1.4658 down from 1.4665 1.4656
Sterling
usd 1.4490 up from 1.4483 1.4480
yen 187.42 down from 187.77 187.81
sfr 2.3795 down from 2.3797 2.3805
Australian dollar
usd 0.5431 up from 0.5428 0.5417
yen 70.24 down from 70.37 70.26
stg 0.3748 unchanged 0.3748 0.3740