WSJ:WORLD FOREX: Dollar, Euro Fall Vs Yen On Exporter Selling, Risk-Aversion
-- Dollar falls against yen on selling by exporters
-- Japan plans to increase intervention capacity, though no immediate impact to market seen
-- Euro drops due to weak stocks, New Zealand credit downgrade
By Takashi Mochizuki
Of DOW JONES NEWSWIRES
TOKYO -(Dow Jones)- The dollar fell against the yen in Asia Friday due to Japanese exporter selling related to their fiscal half-year end while the euro took a hit from New Zealand's credit downgrade by major rating companies.
The greenback stood at Y76.55 as of 0450GMT from Y76.85 in New York Thursday. Dealers said exporters were settling accounts as they are closing their books for the first half of this fiscal year today.
As the greenback fell against the yen, Japanese Finance Minister Jun Azumi issued a fresh warning, saying "we will stay vigilant over speculative movement, and we will also keep all steps on the table and take act decisively if that becomes necessary."
Along with the remark, Azumi also said Japan plans to boost its capacity by Y15 trillion to Y46 trillion to conduct foreign exchange market interventions.
But market participants showed no big reaction to the plan as it was just an announcement, not an action. J.P. Morgan Chase Bank's chief strategist Junya Tanase said it doesn't mean Japan has stepped closer to another intervention campaign.
"Our view on Japan's intervention stance is unchanged," he said.
The euro, meanwhile, was at $1.3537 and Y103.62 from $1.3599 and Y104.46. Mitsubishi UFJ Trust and Banking's senior dealer Toshihiko Sakai said that's because investors were reluctant to buy the euro, which is yielding higher but also riskier than its U.S. and Japanese counterparts.
In addition to weak share prices in Asia, Standard & Poor's Ratings Services and Fitch Ratings both cut their long-term foreign-currency ratings to AA from AA-plus, citing its worsening external-debt position and the costs of earthquake recovery.
"The most notable move in Asian currency market Friday was the euro, which might have resumed falling," Sakai said.
He said the euro could be supported throughout this global day as funds may adjust their portfolios before finalizing their benchmark rates today. But in the longer-term, the euro remains fragile as debt problems haven't improved, he added.
The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 78.104 from 77.865.
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