LONDON, Jan 17: The yen hit fresh five-year high points against the dollar on Monday on speculation Europe was pushing for stronger Asian currencies to help offset the impact of a weak dollar on eurozone economies, dealers said.
The single European currency stood at $1.3077 against $1.3109 late on Friday in New York. The dollar steadied at 102.00 yen from 102.07 on Friday. The US currency dropped to a low of 101.68 yen in Monday trading, the lowest point since 2000.
The dollar had first hit a five-year low in New York trading last Friday, reaching 101.78 yen. But in late European trading, the yen retreated slightly from the five-year highs. Nonetheless, analysts said the yen's upward momentum since Friday had not fizzled out just yet and there was a good chance of renewed surges as the week unfolds.
"The yen is currently trading around levels not seen since January 2000 as demand for the yen remains strong in the wake of a number of comments from European and US officials that called on Asian authorities to allow a greater degree of foreign exchange flexibility," Bank of Tokyo-Mitsubishi economist Derek Halpenny said.
A sharp appreciation of the yen is feared, however, because it could hurt Japanese exports, the main driver behind the economy's recovery over the past two years. Despite the yen's rise, the dollar has received some support from Japanese importers who were seeking to hedge their positions, dealers in Tokyo said.
Economists were looking ahead to Wednesday's publication of US inflation data, set to be analysed closely for signs of inflationary pressures building in the world's largest economy and whether the Federal Reserve would need to raise interest rates more aggressively than previously thought.
US interest rates currently stand at 2.25 per cent after five quarter-point rises since last June. The euro was changing hands at $1.3077 against $1.3111 late on Friday in New York, 133.39 yen (135.33), 0.7028 pounds (0.7005) and 1.5453 Swiss francs (1.5504).
The dollar stood at 102 yen (102.07) and 1.1817 Swiss francs (1.1718). The pound was at 1.8607 dollars (1.8716), 189.79 yen (192.86) and 2.1989 Swiss francs (2.2132). On the London Bullion Market, the price of an ounce of gold stood at $422.25 against $422.50 late on Friday. -AFP
