By Myra P. Saefong, MarketWatch
TOKYO (MarketWatch) -- The U.S. dollar climbed against most currencies in Asia’s Wednesday afternoon trading after Japan took action in the global foreign-exchange markets in a bid to halt the yen’s advance against the greenback.
The dollar index (DXY 81.57, +0.49, +0.61%) , which tracks the performance of the greenback against a basket of six major currencies, traded at 81.691, down from 81.064 late North American trading Tuesday.
Japan’s Finance Minister Yoshihiko Noda confirmed that his ministry intervened in the foreign-exchange markets but didn’t specify the amount of intervention, according to reports. See report on Japan’s intervention in the forex market.
“The move follows weeks of verbal intervention by the Japanese authorities,” said Mitul Kotecha, head of foreign-exchange strategy at Credit Agricole.
The action also came a day after a leadership election for the ruling Democratic Party of Japan, in which Prime Minister Naoto Kan survived an internal challenge to his leadership. Read the full story on the election results.
By Wednesday afternoon in Asia, one U.S. dollar bought ¥84.90, rebounding from a more than 15-year low of ¥82.85 seen before the currency intervention. The dollar traded at 83.13 late Tuesday in North America.
Japan joins the club
“When viewed from the perspective of Asian currencies, the Japanese intervention has put Japan in line with other Asian central banks, which have been intervening to weaken their currencies,” said Kotecha.
“However, Asian central bank intervention has merely slowed the appreciation in regional currencies, and Japan may have to be satisfied with a similar result,” he said.
Also, the “sensitivity of Asian currencies in general to the [dollar-yen rate] has lessened considerably over recent months, but still remains significant for some such as” the Malaysian ringgit, Singapore dollar, Philippine peso and Thai baht, said Kotecha.
Interbank foreign exchange rates show that the U.S. dollar at 3.1185 ringgit from 3.1040 ringgit late in North American trading Tuesday; at 1.3376 Singapore dollars versus S$1.3328; at 44.372 pesos versus 44.030 pesos; and at 30.83 baht vs 30.74 baht, according to Thomson Reuters data reported by Dow Jones Newswires.
Against the U.S. dollar, the euro bought $1.2961, down from $1.3024 late Tuesday in North American trading.
