Dollar gains ground in Asia


The dollar gained ground against major currencies in Asian trade Friday after positive US jobs and trade data and over the news of a Japanese bank failure, dealers said.

The dollar rose to 84.29 yen in Tokyo morning trade compared with 83.85 dollars in New York Thursday. The euro dropped to 1.2667 dollars from 1.2697 dollars in New York, while firming to 106.76 yen from 106.47.

“Investors are all buying the dollar,” said Masatsugu Miyata, forex dealer at Hachijuni Bank.

He said foreign investors were dumping the Japanese unit after reports that the private Incubator Bank of Japan (IBJ) will file for the bankruptcy, the first bank failure in the country in seven years.

Japan’s Financial Services Agency has ordered the bank to halt its operations for at least three days and make efforts to protect existing depositors.

The greenback, which touched the lowest level since May 1995 earlier in the week, also rose after better-than-expected figures on jobs and trade data were released overnight in the United States.

US Labor Department figures showed the number of Americans filing new claims for jobless benefits last week fell faster than expected to 451,000, down 27,000 from the previous week’s revised figure.

Data released by the Department of Commerce showed the US trade deficit dropped more than expected in July to 42.8 billion dollars as exports reached their highest level in two years, further boosting confidence.

Japan on Friday approved an additional stimulus package of nearly 11 billion dollars, which includes boosting consumption and creating employment as well as investing in green industries and offering support for small businesses.

The plan also specifies a strong yen as an issue which requires “determined action, including intervention, when needed”, while increasing pressure on the Bank of Japan to take additional monetary easing measures.

But the government move was largely ignored by the market as analysts criticised the stimulus as too small to have much impact given the scope of Japan’s economic malaise.

Hachijuni’s Miyata said: “I don’t expect a significant impact from the package.”

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