US dollar hits more than 12-year peak against Ja­pan’s yen

The China Post - - MARKETS -

The U.S. dollar hit a more than 12-year high against the yen on Tues­day as up­beat U.S. data reignited talk of an in­ter­est rate hike this year.

In Tokyo, the dollar briefly hit 125.05 yen — its strong­est level since De­cem­ber 2002 — be­fore set­tling back to 124.59 yen, com­pared with 124.81 yen in New York.

The chances of a U.S. rate hike — which tends to boost de­mand for dollar-de­nom­i­nated as­sets — have in­creased fol­low­ing pos­i­tive eco­nomic data and com­ments from Fed­eral Re­serve chief Janet Yellen that rates would go up “at some point this year.”

As the Fed tight­ens pol­icy, spec­u­la­tion is build­ing that the Bank of Ja­pan will an­nounce fur­ther stim­u­lus to prop up the weak econ­omy, which would tend to soften the yen.

On Mon­day, data show­ing that U.S. con­struc­tion spend­ing picked up strongly in April in­creased be­lief the econ­omy is re­bound­ing af­ter the win­ter stall, which saw it con­tract in the first three months of the year.

Also, the In­sti­tute for Sup­ply Man­age­ment said its mea­sure of U. S. man­u­fac­tur­ing ac­tiv­ity climbed last month from a near two-year low in April, while the Com­merce Depart­ment said per­sonal in­comes rose 0.4 per­cent in April, and dis­pos­able in­come the same, af­ter both were flat in March.

In other trad­ing, the euro fetched US$1.0930 and 136.20 yen, mixed from 1.0924 and 136.35 yen in New York, as in­vestors look for progress in Greece’s at­tempts to strike a bailout deal in or­der to un­lock bil­lions of eu­ros in aid that will al­low it to ser­vice its debts.

The dollar strength­ened against other Asia-Pa­cific cur­ren­cies.

It firmed to 63.74 In­dian ru­pees from 63.63 ru­pees Mon­day, to 13,236.00 In­done­sian ru­piah from 13,208.00 ru­piah, to 33.78 Thai baht from 33.66 baht, and to 44.65 Philip­pine pe­sos from 44.53 pe­sos.

The green­back also rose to 1,114.41 South Korean won from 1,109.14 won, to SG$1.3552 from SG$1.3494.

The Aus­tralian dollar slipped to 76.32 U.S. cents from 76.60 cents while the Chi­nese yuan bought 20.11 yen, against 20.01 yen.

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