The dollar advanced to a two-week high against the yen after reports indicated that Japan’s trade deficit widened in the fiscal year ending March.
It was last trading 0.2 percent higher at 102.61 yen, after earlier touching a high of 102.71 yen. However, the Ukraine tensions are likely to push traders to hold their bets.
However, some dealers downplayed the effect of the weak Japan’s export figures, instead blaming the U.S. currency’s rise on the fewer trading conditions due to the Easter holidays. A Singapore-based trader for a Japanese bank told Reuters that currency flows showed banks in Japan were buying the dollar against the yen.
Currently, most financial markets such as Australia, Germany, the U.K. and U.S. were closed on Friday, with some expected to remain shut today, resulting in lighter market activity.
The euro advanced 0.2 percent to trade at 141.69 yen, and hit the strongest level in two weeks of almost 141.83 yen early today. The 18-nation currency remained steady against the dollar at $1.3810, which was still lower than a three-and-half week high of $1.3906 touched on April 11. In March, the euro rose to $1.40, a 2 ½ -year high, pushing senior European Central Bank policymakers to complain it could hurt euro zone’ s economic recovery.
The dollar index, which measures the dollar against major peers, rose 0.1 percent to 79.892.
“The greenback’s gains are consistent with our caution last week against playing for a breakout as key support for the dollar had been approached,” Marc Chandler, the global head of currency strategy at Brown Brothers Harriman, emailed clients. “The issue remains the same for the week ahead. Assuming no exogenous shocks, such data or comments that require a significant reassessment of the macro-view, that is to say, the continued status quo favours continued range trading,”
The Ukraine tensions have enhanced the yen’s appeal as a safe-haven currency and are likely to keep it steady. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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