Dollar stable in thin Asian trade

TOKYO: The dollar was stable against the yen in thin trade in Asia on Monday morning, following a volatile week when the greenback had neared a post-war low against the Japanese unit.

The dollar recovered slightly to 76.96 yen from 76.76 yen late Friday in New York. The euro firmed to $1.4318 from $1.4250, and to 110.10 yen from 109.30.

The Japanese currency, seen as a safe-haven unit amid market turmoil, last week neared its post-World War II high of 76.25 to the dollar.

Investors were watching Monday whether Japanese authorities would again step into currency markets after they sold yen earlier this month on fears that its strength is hurting Japan's exporters, a driving force of the economy.

"Market players are bracing for the dollar to fall further to the mid-76 yen range while closely watching for the risk of intervention," said Nobuyoshi Kuroiwa, senior deputy general manager of Hachijuni Bank's forex team.

"The greenback may get dragged down in afternoon trade," he said. "But for now it seems stable at the upper 76-yen level because of fears of another intervention."

Japan's Cabinet Office reported Monday that the country's economy shrank an annualised 1.3 percent in the April-June quarter, a better-than-expected figure following the March 11 quake and tsunami disaster.

Post-disaster falls in consumer spending and in April exports were the main causes of the third straight quarterly contraction, analysts said.

The reading beat market expectations of a 2.7-percent contraction, but Kuroiwa said the currency trade, thin during the summer vacation period, did not react to the growth data.

Copyright AFP (Agence France-Presse), 2011