The dollar edged up against the yen in Asia on Thursday but downbeat US economic news weighed on the unit, while the euro firmed ahead of a European Central Bank (ECB) policy meeting.
In afternoon Tokyo trade, the dollar bought 99.11 yen, up from 99.06 yen in New York on Wednesday.
The euro bought $1.3113 and 129.98 yen, against $1.3091 and 129.65 yen in US trade.
The greenback, which sat around 100 yen in Asia Wednesday, dived in New York on weak US private-sector payrolls data for May, while the Federal Reserve’s Beige Book report on economic conditions showed the economy expanding at a “modest to moderate” speed, suggesting still slow expansion.
Also, the ISM purchasing managers index for the services sector pointed to a hiring standstill despite a pickup in sector growth.
The results add to growing concerns about the US recovery as dealers await the release of closely watched non-farm payrolls figures on Friday, while they are also keeping an eye on the next move from the Fed amid expectations it will soon start pulling back on its monetary easing.
Disappointment over Japanese Prime Minister Shinzo Abe’s latest plan to kickstart the world’s third-largest economy also fuelled yen-buying, dealers said.
“The dollar-yen’s pull back has continued unabated as disappointment over ... Abe’s ‘third arrow’ speech of structural reforms and a pull back in US Treasury yields, taken together with firming risk aversion, have all contributed to a firmer yen,” Credit Agricole said.
Most market watchers expected the ECB to stand pat at its regular monthly meeting later in the day as it examines the effects of a recent cut in interest rates on the eurozone’s recession-hit economy.
“While the ECB is unlikely to ease monetary policy further at today’s meeting, it should keep a dovish bias and remain ‘ready to act’ in the future,” Credit Agricole said.
The dollar was mostly higher against other Asia-Pacific currencies Wednesday.
It firmed to Sg$1.2497 from Sg$1.2478 the previous day, to 1,118.82 South Korean won from 1,115.45 won, to 30.58 Thai baht from 30.49 baht, to 56.90 Indian rupees from 56.47 rupees and to 9,906 Indonesian rupiah from 9,868 rupiah.
But it eased to Tw$29.78 from Tw$29.81 while it was flat at 42.20 Philippine pesos.
The Australian dollar fell to 94.60 US cents from 96.38 cents and the Chinese yuan slipped to 16.14 yen from 16.25 yen.
