Yen faces selling pressure in Asian trading

TOKYO- The yen faced selling pressure in Asia Friday as speculation of more Bank of Japan monetary easing weighed on the unit, while upbeat US data supported the dollar.

The greenback was trading around five-year highs in Tokyo, buying 104.77 yen against 104.82 yen in New York Thursday.

The US unit briefly topped the 105 yen level earlier Friday, after US weekly jobless claims fell more than expected — offering more evidence of a firming US economy.

“Players adjusted their dollar-long position after the dollar topped 105 yen,” said Yosuke Hosokawa, a dealer at Sumitomo Mitsui Trust Bank.

“But yen-selling pressure appears strong. It would be no surprise to see the dollar rise to 110 yen in the January-March quarter,” Hosokawa told Dow Jones Newswires.

The euro jumped past five-year highs to 143.88 yen from 143.51 yen in US trade while it fetched $1.3733 against $1.3692.

The yen has been in retreat for most of this year as the BoJ’s aggressive easing programme held down the unit, while the US Federal Reserve’s decision last week to start scaling back its own bond-buying programme in January gave the dollar a lift.

The pullback on Fed asset purchases means fewer dollars in the financial system, boosting demand for the greenback.

While the BoJ held off fresh policy measures following a meeting last week, its chief Haruhiko Kuroda met with Prime Minister Shinzo Abe Thursday, helping to stoke speculation of more easing after Japan’s third-quarter growth slowed markedly.

In upbeat news, consumer price data published Friday showed that Japan’s war on deflation got a boost last month with a key inflation indicator rising at its fastest pace in 15 years.

Reversing years of falling prices is the centrepiece of Abe’s bid to kickstart the world’s third-largest economy.

The dollar was mixed against other Asia-Pacific currencies.

It slipped to Sg$1.2677 from Sg$1.2681 the previous day, to Tw$29.97 from Tw$30.00, to 1,055.00 South Korean won from 1,059.10 won and to 44.35 Philippine pesos from 44.41 pesos.

The dollar also declined to 32.81 Thai baht from 32.82 baht while it strengthened to 12,278 Indonesian rupiah from 12,140 rupiah and to 62.10 Indian rupees from 61.97 rupees.

The Australian dollar rose to 88.85 US cents from 88.83 cents. The Chinese yuan was unchanged at 17.26 yen.