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Dollar tumbles versus yen

Dollar tumbles versus yen

LONDON: The dollar tumbled against the yen in thin post holiday trade in Asia on Wednesday, with some shareholders choosing to lock in profits after excited monetary data pushed the U.S. currency up to a two-week high overnight.
At last check, the dollar USDJPY, -0.22% was at ¥120.41, from ¥120.79 late Tuesday in New York.
Figures released Tuesday showed that U.S. gross domestic product grew an annualized 5% between July and September — the fastest pace in more than a decade — helping push up the dollar to ¥120.82 and the Dow Jones Industrial Average above 18,000 at the close for the first time.
The upbeat data and rise in U.S. shares buoyed the Tokyo stock market — the Nikkei Stock Average was up 1.1% at midday — but the dollar started weakening in the morning session, falling to as low as ¥120.27 in Tokyo in what appeared to be profit-taking.
“The dollar is vulnerable to flows of profit-taking,” especially after its upswing, said Kyosuke Suzuki, head of the FX and money market sales department at Societe Generale in Tokyo.
Currency trading is likely to remain subdued during the holiday season, a factor that often exaggerates relatively big flows related to commercial trade settlements ahead of the year-end book closing, said Suzuki, adding that the dollar may “remain vulnerable to moves in either direction.”
J.P. Morgan said in a morning note that the dollar has a “tendency to regain volatility gradually” after the holiday season, with possible moves coming before the year-end or in the new year. The dollar’s strength over night reinforced the possibility that the dollar will test a recent high of ¥121.86 set on Dec. 8 toward the beginning of the new year.
In other currency trading, the euro EURUSD, +0.25% was at $1.2188, from $1.2171, and at EURJPY, +0.03% ¥146.76, from ¥147.01.
The WSJ Dollar Index BUXX, -0.19% a measure of the dollar against a basket of major currencies, was down 0.17% at 82.74.