TOKYO- The dollar held steady in Asia Tuesday ahead of US housing data, while the yen was under pressure after a record Japanese trade deficit boosted speculation of more central bank monetary easing.
In Tokyo afternoon trade, the greenback fetched 102.64 yen, slightly up from 102.62 yen in New York on Monday.
The euro bought 141.59 yen against 141.58 yen while it was also nearly unchanged at $1.3795 from $1.3794 in US trading.
“The dollar remains firm, especially against the yen after Japanese trade number disappointed,” Credit Agricole said.
“The week ahead will likely be relatively quiet given a lack of key focus, and as Geo-political issues in Ukraine continue to cast a shadow on sentiment.”
US Secretary of State John Kerry on Monday urged Russia to take “concrete steps” to implement an agreement on defusing the crisis in Ukraine.
The accord, struck last week in Geneva, was meant to lower the heat on the worst confrontation between Washington and Moscow since the Cold War, but each side has accused the other of violating it.
The yen has been under pressure since Monday when Japan said that its trade deficit surged to $14 billion in March, with a weak currency compounding surging imports as consumers rushed to buy ahead of a sales tax rise on April 1.
The weak data underscored concerns about Japan’s recovery as the country’s first levy increase in 17 years threatens to take a bite out of consumer spending.
That, in turn, has upped speculation the Bank of Japan will have to expand its monetary easing plan, which would tend to weigh on the yen.
“More easing may be needed to support the economy, especially in light of the recent tax hike that took effect April 1 and the weak fragile recovery of Japan’s main trading partners,” Credit Agricole said.
The Japanese government has announced an overhaul of its investment committee that directs the nation’s $1.2-trillion Government Pension Investment Fund, signalling the conservative fund may move away from its bond-heavy portfolio by buying more equities.
“News that Japan’s government pension fund overhauled its investment committee is likely to support the case for more BoJ easing and thus a weaker yen,” Credit Agricole said.
Investors are now eying US housing data later in the day and durable goods orders on Thursday as they try to gauge the state of the world’s largest economy, ahead of the Federal Reserve’s meeting later this month.
In other trading, the dollar rose to 60.71 Indian rupees from 60.33 rupees on Monday, to 11,513.80 Indonesian rupiah from 11,437.00 rupiah, and to Sg$1.2544 from Sg$1.2525.
It edged up to Tw$30.27 from Tw$30.23, to 32.32 Thai baht from 32.23 baht, and to 44.50 Philippine pesos from 44.41 pesos.
The greenback slipped to 1,038.60 South Korean won from 1,039.00 won.
The Australian dollar firmed to 93.50 US cents from 93.34 cents while the Chinese yuan fetched 16.44 yen against 16.46 yen.