Tokyo: The dollar gained some ground against the yen in Asian trade on Thursday after US Federal Reserve chairman Ben Bernanke said his economic outlook was unchanged after the rout on global stock markets.
The dollar firmed to 118.73 yen in Tokyo morning trade from 118.49 yen late Wednesday in New York.
The euro edged down to 1.3229 dollars from 1.3231 but firmed to 157.04 yen from 156.87.
“Players took Bernanke’s remarks as a lead to buy back the dollar in overseas trade and that sentiment continued here,” said Hideaki Inoue, chief manager at forex trading at Mitsubishi UFJ Trust and Banking Corp.
At a House of Representatives panel, Bernanke said the Fed “has been closely monitoring the markets” and added that “they seem to be working well, normally” a day after the sharpest decline in global stocks in years.
As for the US economic outlook, Bernanke said “my view is that, taking all the new data into account, that there is really no material change in our expectations for the US economy since I last reported to Congress a couple weeks ago.”
The Commerce Department on Wednesday made a sharp downward revision to US gross domestic product (GDP) growth in the fourth quarter to 2.2% from an earlier estimate of 3.5%.
But Bernanke said, “We are looking for moderate growth in the US economy going forward.”
Dealers, however, said it was still too early to predict whether the worst of the recent turmoil in financial markets was over.
“A lot of players are still wondering if such large fluctuations can settle down after only a day or two,” said Yosuke Hosokawa, head of forex group at Chuo Mitsui trust Bank.
“We still need to know the real trigger for the global slump and its long-term effect,” Hosokawa said. “Directionless trading is expected to continue for the time being.”
Mitsubishi’s Inoue also said: “We also want to confirm how steady the US economy is at this stage by watching key economic indicators to be released from now on.”