Yen slips as Tokyo share price gains encourage risk

TOKYO - The yen edged lower against other major currencies on Wednesday as moderate gains in Tokyo share prices encouraged investors to seek riskier assets.

By (Reuters)

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Published: Wed 29 Jul 2009, 8:31 AM

Last updated: Thu 2 Apr 2015, 8:30 AM

The euro held firm against the dollar but stayed shy of Tuesday’s eight-week high after news of weaker-than-expected consumer confidence in the United Stated prompted investors to cut long positions in the European currency.

Investors remained cautious about a recent run-up in financial markets, and any weak data could be a trigger for profit-taking.

“There’s wariness about rises in stocks and currencies such as the euro and commodity-linked currencies. So profit-taking could easily take place,” said Yuji Saito, head of forex sales at Societe Generale.

“But when stocks rise, the currency market has to follow,” he said.

The euro edged up 0.1 percent to 134.12 yen from late U.S. trade on Tuesday, when it fell more than 1 percent.

Against the dollar, the euro was up 0.1 percent at $1.4187, retreating from Tuesday’s high of $1.4305 on trading platform EBS, its highest since early June.

The dollar was steady at 94.58 yen.

Conference Board data on Tuesday showed U.S. consumer confidence slid more than expected in July, recording its second consecutive month of decline as sentiment remained hampered by a difficult job market.

A Standard & Poor’s/Case Shiller report on Tuesday showed U.S. single-family home prices rose in May, the first increase in nearly three years.

With signs that the U.S. housing market may be stabilising, investors will also be examining U.S. consumption and employment conditions in coming data, dealers said.

They also await more U.S. Treasury auctions this week and the effect on yield moves. A record $42 billion two-year Treasury auction on Tuesday had little impact on the currency market, although details of the outcome were not encouraging for the dollar.

Indirect bidders, a key gauge of foreign interest, accounted for just 32.6 percent versus a three-auction average of 51 percent.

The Treasury will auction $39 billion of five-year notes on Wednesday and $28 billion of seven-year notes on Thursday.

Commodity-related currencies were firmer with the Australian dollar up 0.2 percent at $0.8274 after jumping to 10-month high of around 0.8340 on Tuesday buoyed by upbeat comments on Australia’s economy by the central bank governor.

The Aussie was higher 0.2 percent at 78.25 yen after touching six-week high of around 79.30 yen the previous day.

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