TOKYO: The dollar rose to a five-year high against the yen in Asian trading Thursday on the back of strong Japanese share prices in a thin holiday market.
The greenback rose to 104.85 yen in early trade, its highest since October 2008, before settling at 104.71 yen.
The level compared to 104.39 yen seen Wednesday in Tokyo. New York was closed for the Christmas holiday.
The euro bought $1.3679 and 143.27 yen against $1.3668 and 142.71 yen on Wednesday in Tokyo.
Strong Japanese stock prices were a major market-moving factor. The benchmark Nikkei index ended at a six-year high of 16,174.44, up 1.03 percent.
Many stock markets globally have been rising as more signs of a US economic recovery emerge.
Traders say the dollar should soon test the 105 yen mark, especially if US jobless claims data due later in the day turn out to have fallen.
"If fresh claims turn out to be less than 320,000, we can say the result is favourable," said Masafumi Yamamoto of Praevidentia Strategy.
Investors will also closely monitor Japan's consumer price data due Friday, as they expect the US currency to rise further.
"I don't see any big barriers for the dollar beyond 105 yen, so we may see further fast-paced gains afterwards," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.
The dollar's upward momentum against the yen eased slightly as the market turned a little cautious over Japanese Prime Minister Shinzo Abe's visit to the controversial Yasukuni war shrine.
The Shinto sanctuary honours Japanese war dead, including top war criminals from World War II and is seen by China and South Korea as a symbol of the nation's militarist past.
Beijing and Seoul condemned the visit, raising fears that Tokyo's ties with the two key neighbouring trade partners would deteriorate further.
While some analysts said the impact of Abe's action on the forex market may remain limited, others voiced worries.
"It would probably have been better if he didn't go," said Masaru Ishibashi, head of FX trading group at Sumitomo Mitsui Banking.
The dollar was mixed against other Asia-Pacific currencies.
It firmed to Sg$1.2681 from Sg$1.2675 on Wednesday, to 32.82 Thai baht from 32.74, to 44.41 Philippine pesos from 44.34 and to 61.97 Indian rupees from 61.80 rupees.
It slipped to 1,059.10 South Korean won from 1,059.92 and to 12,140 Indonesian rupiah from 12,201 rupiah.
The US unit was flat at Tw$30.00.
The Australian dollar dropped to 88.83 US cents from 89.23 cents. The Chinese yuan changed hands at 17.26 yen from 17.19 yen.
Comments
Comments are closed for this article.