Dollar up in Asia on US Fed chief nomination

TOKYO: The dollar climbed against the yen on Wednesday as investors cheered news US President Barack Obama was poised to nominate the dovish Janet Yellen as the next head of the Federal Reserve.

In Tokyo midday trading, the greenback rose to 97.29 yen, from 96.86 yen on Tuesday in New York, where fears over the US government shutdown and a possible debt default hung over markets.

The euro weakened to $1.3563 from $1.3572, while rising to 131.99 yen from 131.47 yen.

“Among the major leads in the market today…a strong one is the Yellen decision,” said Toshihiko Sakai, senior dealer at Mitsubishi UFJ Trust and Banking.

“As a reaction to that, in the belief that the Fed will have a dovish chair, stocks picked up while there was an unwinding of short dollar/yen positions.”

Yellen is a supporter of the Fed’s $85-billion-a-month bond-buying scheme and is considered unlikely to wind it down too soon. However, while a continuation of the loose monetary policy would be expected to press thedollar lower, dealers took the news as a positive, boosting riskier assets.