Dollar's yen rally stalls in Asia

TOKYO: The yen edged up against the dollar Wednesday as a recent sell-off in the unit over the past month ran out of steam following mixed US economic data, while Japan's top central banker raised concerns about its weakness.

In Tokyo, the greenback weakened to 117.81 yen from 117.97 yen in New York.

The euro was also lower at $1.2472 and 146.94 yen compared with $1.2473 and 147.18 yen in the US, where it had rallied on news that Germany had narrowly averted falling onto recession.

The US Commerce Department said Tuesday that third-quarter growth came in at 3.9 percent, up from a previous estimate of 3.5 percent and easily beating expectations for 3.2 percent.

The figures are the latest showing the world's number one economy is on a healthy recovery track, while those in the eurozone and Japan struggle. However, the result was offset by figures showing consumer confidence dipped in November from October.

On Tuesday, BoJ head Haruhiko Kuroda said policymakers were wary of the impact of the yen's sharp decline on the economy, after it sunk to multi-year lows in reaction to the bank's ramped-up stimulus announced on October 31.

He also acknowledged that while a weak yen is positive for exporters, it weighs on household incomes and hurts smaller firms' earnings because of rising import costs.

"There is going to be a limit to the dollar's rise, and at some point the currency markets will reach a consolidation point," said Hajime Kitano, Japan equity strategist at Barclays.

The "dollar-yen pair may be poised for a pullback soon", he told Dow Jones Newswires.

And Tatsunori Kawai, chief strategist at kabu.com Securities added: "After a consistent string of dollar surges over the last month, we may finally be entering a 'cooling off period' for the greenback -- at least against the yen."

In Europe, Germany released figures showing the eurozone's biggest economy expanded 0.1 percent in July-September thanks to higher household and government spending.

The data, which comes a day after the first pick-up in business confidence for seven months, means it avoided a technical recession after shrinking 0.1 percent in the previous three months.