Yen falls against greenback on concern of June 25 polls
Yen falls against greenback on concern of June 25 polls
HONG KONG (AFP): Concerns over Japan's financial sector and
political uncertainties ahead of the June 25 general elections
led to yen falls against the dollar as other regional currencies
posted mixed performances
The Japanese yen lost ground during the week amid concerns
about Japan's financial sector and uncertain political moves
ahead of the June 25 elections, dealers said.
The Japanese unit traded at 108.61 against the dollar compared
with 107.44 a week earlier.
It held firm against the dollar earlier in the week amid
improving unemployment figures, dealers said.
Japan announced Tuesday its unemployment rate fell slightly to
4.8 percent in April from the previous month's post-war record
high of 4.9 percent.
However, the yen fell after the collapse of a life insurer
triggered concern over Japan's financial sector, dealers said.
"Concern over Japan's financial sector has been dragging down
the yen," said Fuji Bank dealer Hideyuki Tsukamoto.
Investors were wary after Daihyaku Life Insurance Co.
collapsed on Wednesday, he said.
The election too added to foreign investor concern, another
dealer said.
"Political uncertainty has eroded foreign investors' sentiment
over Japan, but it will not pose a tangible downside risk on the
economy," Bank of Tokyo-Mitsubishi chief analyst Koji Fukaya
said.
Prime Minister Yoshiro Mori, defying a dramatic plunge in his
popularity, dissolved parliament Friday.
There were positive signs for the Australian dollar but much
still depends on its U.S. counterpart in the week ahead, brokers
said.
"There are some positives for the Aussie in the shape of an
improving trade balance, strengthening world growth and the
upward trend for commodity prices," said Colonial State Bank's
Craig James.
Additional U.S. rate hikes could weaken interest in the U.S.
dollar, throwing a lifeline to the Australian dollar.
The local currency closed the week at 57.14 U.S. cents from
57.07 U.S. cents the week before.
On the Reserve Bank's Trade Weighted Index it was at 51.4
point the same as the previous week.
The New Zealand dollar ended the week at 45.59 U.S. cents up
from 45.33 U.S. cents the previous week.
"It was a very quiet day with a tight range," a currency
dealer said. "The kiwi is basically going to be stuck in a 45.60
- 46.00 cent range until something drastic happens," the dealer
said.
The Hong Kong dollar was trading at 7.7921-7.7924 to the U.S.
dollar Friday, down on the previous week's 7.7917-7.7922.
The Singapore dollar firmed to 1.7275 against the U.S. dollar
on Friday from 1.7332 a week earlier.
Despite Singapore's strong economic fundamentals, dealers said
investor uncertainty surrounding regional economies could result
in the currency facing selling pressure.
The Taiwan dollar was marginally higher against the greenback
over the week closing at 30.803 on Saturday as the local currency
regained momentum following weakness earlier in the week, dealers
said.
The Philippine Peso closed at 42.47 pesos to the dollar on
Friday slightly higher than 42.72 pesos the previous week.
The South Korean won strengthened from 1,136.5 won to the
dollar a week earlier to 1,125.20 won Friday after foreign
investors returned to the bourse as uncertainties over the credit
crunch faced by the Hyundai Group showed signs of abating. The
won is likely to keep strengthening as foreign investors appear
ready to buy more shares, dealers said.
The Indonesian rupiah closed Friday at 8,485 to the dollar,
slightly weaker than last week's close of 8,455 to the greenback,
after falling as low as 8,700 late last month amid violent
student protests.