Tokyo: The dollar fell against the yen in Asia as some traders sold the currency to lock in profits after it bounced back to its highest point in more than a week overnight.
The dollar was changing hands at 102.42 yen midafternoon in Tokyo, down from 103.09 yen late Thursday in New York. The euro rose to $1.5904 from $1.5888.
Over the past few days, the dollar has steadily recovered versus the yen with the help of a pickup in global equity markets. Earnings from U.S. financial institutions, many of which came stronger than expected, also prodded players to buy the greenback as fears over the U.S. financial crisis has largely dissipated.
But Tokyo dealers still haven’t let their guard down against downside risks for the dollar, saying the overall situation remains unchanged.
JPMorgan Chase Bank currency strategist Junya Tanase pointed out the U.S. economy has not improved much.
“There is no clear sign that the economic environment in the U.S. is improving,” he said. “It’s necessary to keep looking out for dollar sales” triggered by another downturn on Wall Street or rising speculation of further rate cuts by the Federal Reserve.
Against other currencies, the dollar was mixed. It rose 0.05% against Indian rupee to 39.800, while falling 0.18% against Philippine peso to 41.945.