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Dollar recovers to 113 yen as rising stocks whet risk appetite

January 5, 2018

The U.S. dollar rose above the 113 yen line Friday in Tokyo as traders rekindled their risk appetite following strong advances in U.S. and Japanese stocks.

At 5 p.m., the dollar fetched 113.14-15 yen compared with 112.70-80 yen in New York and 112.57-59 yen in Tokyo at 5 p.m. Thursday. It moved between 112.73 yen and 113.15 yen during the day, changing hands most frequently at 112.79 yen.

The euro was quoted at $1.2057-2058 and 136.42-46 yen against $1.2063-2073 and 136.00-10 yen in New York and $1.2027-2029 and 135.39-43 yen in Tokyo late Thursday afternoon.

Traders sold the safe-haven yen for the dollar after U.S. stocks continued their upswing overnight in New York, with the Dow Jones Industrial Average closing above 25,000 for the first time.

The selling accelerated in Tokyo time as Japan’s Nikkei stock index extended gains following a sharp rise on Thursday, dealers said.

“The Nikkei stock index rose significantly on Thursday and Friday, so the yen was sold in a risk-on mood,” said Yukio Ishizuki, senior foreign exchange strategist at Daiwa Securities Co.

But market players also refrained from bold moves, awaiting the release later in the day of a set of U.S. economic data including December nonfarm payrolls.

“The majority of the views are that the employment data will be strong as many people were employed in the year-end shopping season,” Ishizuki said, while adding, “There may be disappointment if the average hourly wage comes out low.”

Traders will also be keeping close tabs on the Institute of Supply Management report on the U.S. nonmanufacturing sector for December.

The euro rose against the yen while trading narrowly against the dollar, remaining firm after recent data showed strength in the eurozone economy, including a robust purchasing managers’ index released Thursday, dealers said.


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