Dollar moves narrowly ahead of Bernanke speech
TOKYO - The dollar was range-bound against other currencies in Asia on Friday ahead of a speech from Federal Reserve chairman Ben Bernanke and amid worries over the world’s top economy, dealers said.
The dollar fetched 84.34 yen in Tokyo morning trade, hardly changed from New York late Thursday.
The euro fell to 1.2693 dollars from 1.2720 in New York and to 107.07 yen from 107.35 yen.
“The biggest focus of market attention is the Bernanke speech scheduled for today at a Wyoming seminar,” said Toshihiko Sakai, senior dealer at Mitsubishi UFJ Trust and Banking.
“The market is watching how he phrases the current state of the economy... It would trigger bond buying and dollar selling if he suggests additional monetary easing,” Sakai said.
Bernanke is scheduled to give a much-anticipated speech on the economy, with the market expecting him to touch on efforts to prevent a double-dip recession after a raft of weak data.
The markets also braced for a sharp US government revision Friday of second quarter economic growth.
The government could revise downward gross domestic product growth chalked up in the second quarter to 1.4 percent from 2.4 percent previously, most economists said.
The dollar fell to the mid-83 yen range to hit a 15-year low earlier this week as market players have been losing confidence in the strength of the US economy.
The dollar got support from speculation that Japanese authorities may step into markets to stop the yen from rising further.
But Sakai argued the upcoming leadership race in Japan’s ruling party may cause a power “vacuum”, making it impossible for the government to act on the strong yen in a heavy blow to exporters.
Prime Minister Naoto Kan has faced a party leadership challenge from scandal-tainted powerbroker Ichiro Ozawa for the September 14 vote to pick the ruling Democratic Party of Japan’s head, the springboard for premiership.
The market may doubt whether the current government has “legitimacy” to act if it may go in two weeks, Sakai said.