Dollar Holds its Ground against the Yen amid Ukraine Tensions

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Dollar Holds its Ground against the Yen amid Ukraine TensionsThe U.S. dollar remained firm against yen near its lowest level in a week today, as the market fretted over the impact of the Ukraine tensions on the U.S. economy.

The dollar was last trading at 102.35 yen, which is closer to a weekly low of 102.085 that was touched yesterday. So far, the dollar has performed poorly against the Japanese currency, having plunged 0.1 percent.

“Although the price action in the currency market has been limited so far, the escalation of tension in Ukraine is likely to keep markets risk-off,” Kyosuke Suzuki, director of forex at Societe Generale, told Reuters.

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The yen barely reacted to data that showed Tokyo’s core consumer prices rose 2.7 percent in April, in what is the first reading by Japan’s interior ministry since April 1 consumption tax hike. When stripped of the effect of the tax hike, inflation rate stood at 1 percent.

Most analysts predict that inflation in Japan will gradually ease in 2014, something Bank of Japan’s Governor Haruhiko Kuroda says won’t happen, insisting it will reach the central bank’s target of 2.0 percent. Nonetheless, investors are awaiting Wednesday’s BOJ economic outlook that will be released on Wednesday.

The euro held firm at $1.3833 after earlier touching a trough of $1.3791 on Thursday after ECB President Mario Draghi said that the bank will roll out monetary easing programs such as negative interest rate and asset-purchases should the common currency strengthen any further. The strong euro has hurt exporters in the economic bloc, which some of them reporting losses. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com