U.S. Dollar Stays Firm Against Yen in Asian Trading Hours

The U.S. dollar continued to trade strongly against the Japanese yen on Monday and was stable against all major traded currencies after unexpectedly strong U.S. nonfarm payrolls data released on Friday reemphasized the fact that the world’s largest economy was rebounding.

A data release on Friday showed that speculators raised their bets on the U.S. unit to a seven-month high in the latest week as barrage of better than expected U.S. economic indicators raised expectations that the Federal Reserve might end its economic stimulating measures by the year-end, which will be dollar-supportive.

The greenback continued to trade near its three and half year high against the yen during the Asian trading on Monday. The dollar traded at 96.10 yen as of 0515 GMT from 95.98 yen late Friday in New York, showed a data provided by EBS Market.

The dollar index, a gauge on U.S. unit’s performance against a basket of six major traded currencies, was hovering around its seven month high. Earlier on Friday the dollar index hit a seven month high of 82.924 not too far from its July 2012 peak, when it touched 84.10.

“We remain constructive on the dollar. There are expectations that the Fed could consider reducing the size of its asset purchases in the second half of the year and this could help the dollar,” said Valentin Marinov, head of European G10 FX strategy at Citi, according to Reuters.

Meanwhile, Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said in a note that many market participants are anticipating a dollar target of 100 against the yen.

“The argument in favor of U.S. dollar’s rise again yen is “growth differentials mediated by interest rate differentials,” said Harriman.

However, Harriman pointed out that any further slump in the value of yen in the wake of unprecedented economic stimulating measures was highly unlikely. “We are skeptical that Abenomics will be able to push the yen much further.”

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.