Yen under pressure amid Japan political uncertainty

TOKYO: The yen came under pressure against the dollar in Asia on Thursday amid political uncertainty in Japan with Prime Minister Naoto Kan facing a no-confidence vote, analysts said.

After rising above 81 yen earlier in Tokyo trade, the dollar stood at 80.95 yen in the afternoon. It traded at 80.92 yen in New York late Wednesday.

The greenback fell to its lowest level in two weeks in New York as weak jobs and manufacturing data sparked concerns over the economic outlook in the US.

The dollar rebounded in Asia despite lower stock prices.

"The dollar turned up in an autonomous reaction to the overnight falls. It also gained support due to the shaky political situation in Japan," said Mizuho Corporate Bank market economist Daisuke Karakama.

"Lower stock prices usually spawn risk aversion and lead to yen buying... Given the earthquake, nuclear crisis and now this political shake-up, however, the currency of such a country can hardly attract buying," he said.

Kan, already struggling with recovery efforts after the earthquake and tsunami in March that sparked a nuclear crisis, faces a no-confidence vote later on Thursday.

In early afternoon, Kan offered to step down once the country has recovered from the March 11 quake and tsunami in a concession to his enemies ahead of a no-confidence vote.

The centre-left leader, in power just under a year, was seeking to quell a revolt within his own party ranks that put his future on a knife-edge.

The euro was mostly flat against the dollar in Tokyo, buying $1.4363 against $1.4331 in New York on Wednesday when the single currency took a beating as news of Moody's downgrade of Greek debt hit the market.

Moody's slashing of its credit rating on Greece to Caa1 from B1 on Wednesday hit a market that had grown more confident in the euro early in the day.

But there was no fresh news Thursday related to the euro-zone debt crisis.

"Trading has been choppy recently, with activity dominated by speculative moves aimed at inducing stop-loss orders on both sides," a senior trader at a Japanese trust bank told Dow Jones Newswires.

The greenback was broadly higher against regional Asian currencies, rising to Sg$1.2379 from 1.2299 on Wednesday, to 1,079.95 Korean won from 1,075.28 and to Tw$28.65 from 28.59.

The unit also gained to 8,552.50 Indonesian rupiah from 8,534.50, to 30.30 Thai baht from 30.28 and to 43.21 Philippine pesos from 43.14.

Copyright AFP (Agence France-Presse), 2011