Yen rally fizzles in Asia

TOKYO: The yen dipped in Asian trade Thursday, with a recent rally running out of steam as a surprise uptick in oil prices boosted sentiment.

In Tokyo, the dollar rose to 117.71 yen, up from 117.39 yen late in New York, where at one point it hit a low of 116.08 yen.

“The risk-off sentiment pushed the dollar-yen pair to as low as 116, but that was probably going too far in the short term,” Mitsushige Akino, an executive officer at Ichiyoshi Asset Management, told Bloomberg News.

The euro edged up to $1.1783 and 138.62 yen Thursday, from $1.1782 and 138.30 yen in US trade.

Traders had moved into the yen in recent days — the unit is seen as a safe haven during times of turmoil and uncertainty — as plunging oil prices shook equity markets and investor confidence.

Adding to selling pressure was a surprise 0.9 percent fall in US retail sales in December and news that the World Bank had cut its growth forecast for the global economy, saying a US recovery was not enough to drag up other economies.

But crude enjoyed a rare five percent rally on Wednesday after fell close to six-year lows, with analysts saying a pick-up had been expected after the commodity had crashed more than 50 percent since June.

“The miss on US retail sales was notable, enough to weigh on growth sentiment,” National Australia Bank said.

Poor data for the US economy raises the possibility that the Fed may hold off a mid-year interest rate hike — a rate rise would tend to boost the dollar.

There was some good news, however, with the Federal Reserve saying in its Beige Book report that the US economy kept up “modest” or “moderate” growth in recent weeks.

Russia’s ruble rose to 64.20 against the dollar. The currency has been hammered as falling oil prices exacerbated fears about Russia’s heavy dependence on energy exports.

Source: AFP