FOREX-Dollar hovers near lows, Aussie jumps

July 21, 2010 By Leave a Comment

TOKYO, July 20 (Reuters) – The dollar eased on Tuesday, inching closer to a two-month low versus the euro hit last week as investors continued to cut long positions on more disappointing U.S. economic data.

The greenback rose a little against the yen on bids from Japanese importers, but remained close to a seven-month low marked last week, leading many market players to look to what authorities in Japan could do about a firm yen.

The Australian dollar jumped more than 1 percent thanks to a rise in Chinese shares as well as buying against the yen amid wariness about Japanese yen-selling intervention.

The Wall Street Journal reported the Bank of Japan could consider taking additional steps to support the economy if the yen climbs to around 85 per U.S. dollar and stays there.

In Asian trade, the dollar rose about 0.4 percent to 87.01 yen JPY=, on buying by Japanese importers, off a seven-month low of 86.27 hit on trading platform EBS on Friday.

Traders suspect Japanese officials would not want to see the 85 level breached in a hurry, though many traders doubt Tokyo is ready to intervene at this point.

“I guess the authorities will be nervous. There will be verbal intervention or they might do rate checks as they did before. But I don’t think they can do actual intervention,” said a trader at a Japanese financial institution.

Indeed, traders say they saw marginal yen-selling by Japanese investors.

“Japanese investors’ risk appetite hasn’t come back. They are not ready to sell the yen yet. It’s hard to expect upside for the dollar/yen,” said a trader at a European bank.

Demand for the dollar waned further on Monday after the NAHB/Wells Fargo Housing Market index fell more than expected in July to its lowest level since April 2009, after a popular tax credit for homebuyers expired in April. [ID:nWEQ003835]

The report was the latest in a string of data that has flashed warnings about the state of the U.S. economy and quashed expectations of a Federal Reserve interest rate hike this year.

If Fed Chairman Ben Bernanke drops any hint of further easing at testimony on Wednesday it could push the dollar down further, some traders said.

“The overall bearish setup remains intact for dollar/yen,” JPMorgan said in a morning report. “This follows last week’s breakdown below the key 87.00/22 yen support zone while affirming the intermediate term bearish setup and a closer test of the 84.82 November 2009 cycle low.”

The euro EUR= edged up 0.15 percent to $1.2963/64, not far from a two-month high of $1.3008 hit last Friday.

Traders expect the pair to trade in a $1.28-1.31 range in the coming days ahead of EU stress test results for banks and Fed chief Bernanke’s testimony.

Support for the euro is seen around the previous day’s low of $1.2870. Resistance comes in at Friday’s high of $1.3008, while some traders say a break of that level could push it to around $1.3113, a Fibonacci retracement of its decline from last December to early June.

The results of stress tests on 91 European banks are due on Friday and there is a consensus building in the forex market that it could be positive for the euro.

Bankers and officials in Greece, Spain and Belgium joined a chorus of countries expecting their banks to pass the stress tests, but doubts linger over whether the checks are tough or transparent enough. [ID:nLDE66I14A]

Some traders suspect the euro could be in for a “buy on the rumour sell on fact” retreat, after having risen nearly 10 percent from a four-year low, mostly shrugging off negative news on the euro zone.

It brushed aside news that Moody’s had cut Ireland’s debt rating and concerns that negotiations between Hungary and international lenders had broken down. [ID:nLDE66I0FY] [ID:nLDE66H021].

Meanwhile, the Aussie AUD=D4 rose 1.1 percent to $0.8775 and 1.4 percent to 76.38 yen AUDJPY=, helped by an upbeat mood in Chinese share markets and wariness about Japanese yen-selling intervention.

The Australian dollar quickly recovered the ground it had lost after minutes from the Reserve Bank of Australia’s (RBA) July policy meeting that suggested it was unlikely to raise interest rates next month if coming inflation data showed the moderation it expected. [ID:nCBR000068]

The currency has strong support around $0.8575-8590, where there is a 50 percent retracement of its rally this month as well as a cluster of previous lows. (Additional reporting by Anirban Nag and FX analyst Krishna Kumar in Sydney; Editing by Michael Watson)

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FOREX-Yen near 1-mth peak on quarter flows, econ doubts

June 26, 2010 By Leave a Comment

TOKYO, June 25 (Reuters) – The yen rose broadly and stayed near a 1-month high against the dollar on Friday on short covering, and as falls in regional share markets prompted traders to further sell risky currencies such as the Australian dollar.

The euro and Australian dollar fell against the greenback on investor doubts about the strength of a global recovery, and were also dragged lower by their weakness against the yen.

The yen and dollar were also supported by concerns that leaders of the Group of Eight and Group of 20 rich and developing nations may not produce a strong and unified response to help the economic recovery at their weekend meetings in Canada.

“It’s all about cutting risky positions with falls in yen crosses leading the market,” said a trader for a Japanese trust bank.

Traders said quarter-end inflows were lending support to the yen JPY=, with Japanese exporters selling the euro.

Dollar/yen options barriers at 89 yen and below are likely to check gains for the Japanese currency in the near-term but some traders said momentum indicated the yen would eventually test 87.95 yen, a high hit on May 6.

Traders said many investors who had gone short on the yen this month on speculation that Japan’s new Prime Minister Naoto Kan will support a weaker yen were unwinding those positions.

Also helping the yen was the Federal Reserve’s dovish statement this week, which contributed to a further fall in already low Treasury yields.

The dollar stood at 89.52 yen JPY=, down 0.1 percent from late U.S trade on Thursday, when it lost about 0.4 percent and hit a 1-month low of 89.22 yen on trading platform EBS.

Japanese exporters are expected to move quickly to sell the dollar early on Monday if dollar/yen finishes Friday trade below 90.00 yen as they have to convert overseas earnings towards the end of the month, traders said.

The dollar index was flat on the day at 85.77 .DXY, with traders expecting it to test support at 85.09, this week’s low, in the near term as softer Treasury yields keep it on the defensive.

U.S. economic reports on weekly initial jobless claims and durable goods orders for May on Thursday were relatively firm yet could not lighten the market gloom. [ID:nN24110731]

The euro fell 0.1 percent to $1.2320 EUR=, giving up some gains made on Thursday when quarter-end buying by portfolio managers helped the currency despite worries about the euro zone’s debt and financial sector.

Gains in the euro were likely to be checked by losses in stock markets, with the currency remaining highly correlated with the S&P 500 index .SPX at a solid 63 percent.

S&P 500 stock futures SPc1 inched up 0.3 percent on Friday in Asia, while Tokyo’s Nikkei stock average .N225 dropped 2 percent, prompting investors to feel more nervous about taking on risk.

Against the Japanese currency, the euro fell 0.2 percent to 110.27 yen EURJPY=R after falling as low as 110.04 yen on EBS.

The Australian dollar slid 0.5 percent to $0.8625 AUD=D4, having lost 0.9 percent on Thursday as investors booked profits in high-yielding currencies after a rally this week.

Uncertainty over Australia’s mining tax after remarks from the country’s new Prime Minister Julia Gillard was also seen as a negative for the currency, traders said.

Gillard said she was open to genuine negotiations with global miners over the government’s planned mining-profits tax, but declined comment on the 40-percent headline rate.[ID:nSYU010129]

Some market players hope a change of leadership would lead to a softening in policy on the 40-percent proposed mining tax.

China’s central bank set the yuan’s daily mid-point CNY=SAEC at 6.7896 par dollar on Friday, the highest level since the July 2005 revaluation. It meant China has allowed its reference rate to rise 0.6 percent this week since it announced a change in the yuan exchange regime at the weekend. [ID:nECB000556]

The euro and the Australian initially edged up on the news then quickly gave back gains. (Additional reporting by Anirban Nag in Sydney and Satomi Noguchi in Tokyo; Editing by Edwina Gibbs)

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Dollar falls to one-month low vs yen

June 25, 2010 By Leave a Comment

June 24 (Reuters) – The dollar fell to a one-month low against the yen on Thursday as the greenback stayed pressured by the U.S. central bank’s pledge to keep rates low for some time. The dollar fell to 89.63 yen JPY=, its lowest since late May.

“Price action in the likes of dollar/yen remains poor, my order board suggests some more weakness to come in dollar/yen with an initial target 89.10 yen,” one London-based spot trader said. (Reporting by Neal Armstrong and Tamawa Desai)

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Nikkei slips off 1-mth high after 5 days of gains

June 18, 2010 By Leave a Comment

TOKYO, June 17 (Reuters) – Japan’s Nikkei average fell 0.7 percent on Thursday after five days of gains, coming off one-month highs, though support was expected to hold at the level of the benchmark’s 25-day moving average.

The Nikkei was stuck near 10,000, which market players say is a prerequisite for confirming a double bottom, but further rises were likely to be hard going amid an apparent lack of investor interest, both from overseas investors and at home.

Foreign investors sold a net 916.9 billion yen of Japanese stocks last week, more than the 75.2 billion yen they sold in the previous week and the biggest outflow in one week since March 2008, Finance Ministry data showed.

“Given where the market stands, investors want to bet on a rebound as long as other financial markets — particularly moves in dollar/yen and euro/yen — are calm,” said Akio Yoshino, chief economist at Societe Generale Asset Management.

“But the environment is actually pretty bad. Not only are Greece’s problems bad but the contagion is also serious, with Spain’s yields rising. The market had been ignoring that aspect up until now but the adjustment in stock prices was probably inevitable.”

A Spanish newspaper reported that the European Union, International Monetary Fund and U.S. Treasury were drawing up an emergency credit line for Spain.

The European Commission denied the report, but the spread between the yield on 10-year Spanish bonds and German bunds hit the highest level in the euro’s 11-year history. [ID:nLDE65F0GX]

Coming off a 1-month high hit the previous day, the benchmark Nikkei .N225 shed 67.75 points to 9,999.40 after spending most of the day above 10,000, a key level that has been both support and resistance at different times over the past year.

It had risen 6.7 percent over the past five trading days in its best such streak since a six-day run from Nov. 30 last year.

Support was seen around 9,800, the level of the Nikkei’s 25-day moving average, after the Nikkei closed above it on Tuesday for the first time in roughly two months.

The next resistance levels will likely be around 10,200 and 10,300, near the Nikkei’s 50-week moving average and its 200-day moving average.

In addition, the 38.2 percent retracement from the Nikkei’s April high of 11,408.17 and its June low of 9,378.23 comes in around 10,156.

The broader Topix slipped 0.6 percent to 887.48.

Market players said on Wednesday that long positions had accumulated in blue chip shares, leaving them vulnerable if upward momentum peters out.

“Wednesday’s rises also were without much strength, since the cash market was pushed up mainly by short-covering in futures,” said Yutaka Miura, senior technical analyst at Mizuho Securities.

Trade was thin on the Tokyo exchange’s first section, with 1.5 billion shares changing hands but up from the four-month low marked early this week.

Declining shares outnumbered advancing ones by 983 to 531.

TAKEFUJI CLIMBS

Shares of consumer lender Takefuji Corp (8564.T) ended the day up 6 percent at 302 yen after a company source said it has secured the 41.4 billion yen ($453 million) of funds it needed to redeem convertible bonds due on Saturday. [ID:nTKB006866]

The news confirmed a report in the Nikkei business daily.

But shares of exporters fell after leading gains in the broader market the previous day, hurt by a flat Wall Street finish in the wake of mixed economic data underlining the uneven nature of the economic recovery.

U.S. housing starts fell more than expected in May to a five-month low, casting a shadow over better-than-expected industrial production data for the same month and underscoring the uneven nature of the recovery, helping Wall Street end flat. [ID:nN16144404]

Sony Corp (6758.T) slid 2.8 percent to 2,564 yen and Kyocera Corp (6971.T) slipped 2.9 percent to 7,990 yen. Honda Motor Co (7267.T) fell 0.8 percent to 2,736 yen.

Shares of Fujitsu Ltd (6702.T) and Toshiba Corp (6502.T) gained after the Nikkei business daily said they had reached a deal to integrate their cell phone businesses, with Fujitsu to take a majority stake in a joint venture to be launched as early as October. [ID:nSGE65F0J1]

Fujitsu rose 1 percent to 593 yen and Toshiba climbed 0.8 percent to 487 yen. (Editing by Edwina Gibbs)

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Euro holds steady above lows after Spain downgrade

May 31, 2010 By Leave a Comment

(Reuters) – The euro stabilized against the dollar on Monday but remained under downward pressure after Fitch Ratings downgraded Spain’s credit rating, refueling concern about Europe’s debt woes hurting the global economy.

Investors may avoid building positions up as the United States and the UK are on holiday on Monday, though some month-end flows may be seen in the market, traders said.

The European single currency is on track for a hefty 7.7 percent decline against the dollar in May, in what would be its sixth straight monthly fall and the biggest percentage drop since January 2009.

“The market is susceptible to negative news and small rallies in the euro on short-covering don’t last for long,” said a trader at a Japanese bank.

“This jitteriness in the market is likely to continue for a while, and it is difficult to see a recovery in market sentiment as there are worries that further bad news about southern European countries may come out,” he said.

Fitch cut Spain’s credit rating by one notch to AA-plus on Friday, saying the country’s economic recovery will be “more muted” than the government forecast due to its austerity measures. The outlook on the new rating is stable.

The euro was steady at $1.2282, staying above a four-year low of $1.2143 hit this month.

“The next 24-hours might put the recent euro low in play at $1.2143,” said a trader at a major Canadian bank.

A key support is seen around $1.2135, a 50 percent retracement of the 2000-08 advance.

Charts indicate a monthly close below $1.2135 would favor additional weakness with the next downside support seen near $1.1640 — a trough hit in November 2005.

The euro was little changed at 111.88 yen, having fallen 0.7 percent on Friday.

The dollar was steady at 91.05 yen. Japanese exporters are expected to sell the greenback when it nears 91.50 yen, traders said.

Month-end flows may have some impact on dollar/yen toward the Tokyo fixing time (10 p.m. EDT) but the currency pair is basically seen staying around 91 yen, they said.

Market players are keeping an eye on Japan’s political turmoil after Japan’s tiny Social Democratic Party on Sunday left the ruling coalition ahead of an election, although its impact on the currency market so far is seen as limited.

Sterling stood at $1.4464 after a British treasury minister resigned on Saturday after revelations about his expenses, dealing a blow to the new coalition government.

(Additional reporting by Anirban Nag in Sydney, Reuters FX analyst Krishna Kumar)

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Europe Factors- Shares seen higher; Intel results strong

April 15, 2010 By Leave a Comment

LONDON, April 14 (Reuters) – European shares are set to open higher on
Wednesday, with technology stocks expected to be in focus after forecast-beating
results from chip maker Intel Corp (INTC.O) reinforced the view of a recovery in
the sector.

Britain’s FTSE 100 .FTSE is seen opening as much as 19 points higher, or
up 0.3 percent; Germany’s DAX .GDAXI is seen opening up 31 to 35 points, or
0.6 percent higher; and France’s CAC 40 .FCHI is seen rising 19 to 24 points,
or up 0.6 percent, according to financial spreadbetters.

Intel Corp’s sales and margin forecasts trounced Wall Street expectations
and the stellar showing from the world’s top chip maker, an industry bellwether
and among the first tech stocks to report first-quarter earnings, lifted Asian
tech shares.

Investors will focus on earnings from the U.S. banking sector on Wednesday
with JP Morgan Chase (JPM.N) posting results before U.S. markets open.

The pan-European FTSEurofirst 300 .FTEU3 index of top shares fell 0.3
percent to close at 1,098.56 points on Tuesday, having moved in a range of 7.89
points during the session.

———————-MARKET SNAPSHOT AT 0515 GMT———————-

LAST PCT CHG NET CHG
S&P 500 .SPX 1,197.30 0.07 % 0.82
NIKKEI .N225 11,200.32 0.35 % 39.09
MSCI ASIA EX-JP .MIASJ0000PUS 506.31 0.76 % 3.81
EUR/USD EUR= 1.3651 0.26 % 0.0035
USD/JPY JPY= 93.24 0.02 % 0.0200
10-YR US TSY YLD US10YT=RR 3.836 — 0.02
10-YR BUND YLD EU10YT=RR 3.146 — 0.00
SPOT GOLD XAU= $1,154.90 0.41 % $4.75
US CRUDE CLc1 $84.38 0.39 % 0.33
———————————————————————–

* GLOBAL MARKETS-Tech propels Asian stocks after solid Intel[ID:nTOE63D01V]

* US STOCKS-Market gains modestly; Intel rises late [ID:nN13100386]

* Nikkei rises 0.3 pct as Intel boosts tech stocks [ID:nTOE63D02N]

* FOREX-Dollar, yen slip on cocktail of Singapore, Intel [ID:nTOE63D00W]

* TREASURIES-Fall in Asia as regional shares firm [ID:nTOE63D01J]

* Oil up above $84 as equities, dollar offset stock build [ID:nSGE63D02S]

* PRECIOUS-Gold recovers after falling nearly 1 pct [ID:nSGE63D00Y]

* METALS-LME copper gains; in narrow ranges ahead of data [ID:nSGE63D02J]

(Reporting by Harpreet Bhal)

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HK shares seen higher on Wall Street earnings bonanza

April 18, 2009 By Leave a Comment

HONG KONG, April 17 (Reuters) – Hong Kong shares are expected
to advance on Friday, joining the rally in other major markets,
after a strong showing from JPMorgan (JPM.N) and Google (GOOG.O)
spurred gains on Wall Street.
Shares in Cathay Pacific Airways Ltd (0293.HK) will be
watched after the airline said on Friday it would cut passenger
and cargo capacity from May following a sharp drop in turnover in
the first quarter of 2009.

From May, Cathay will reduce passenger capacity by 8 percent
and its unit Dragonair will slash capacity by 13 percent. Overall
cargo capacity will be reduced by 11 percent.

On Thursday, the benchmark Hang Seng Index .HSI fell 0.55
percent to close at 15,582.99 as investors locked in gains on a
three-day rally after first-quarter economic data from China came
in roughly in line with expectations.

STOCKS TO WATCH-

* Air China (0753.HK) (601111.SS), which posted
bigger-than-expected 2008 losses, returned to profit in the first
quarter of 2009, helped by an exceptional gain and lower fuel
costs.

The country’s flag carrier posted a net profit of 981.2
million yuan ($143.6 million) in the three months ended March,
down 5.7 percent from the same period last year, based on Chinese
accounting standards.

———————-MARKET SNAPSHOT @ 2246 GMT ————

INSTRUMENT LAST PCT CHG NET CHG
S and P 500 .SPX 865.3 1.55% 13.240
USD/JPY JPY 99.33 -0.01% -0.010
10-YR US TSY YLD US10YT 2.8395 — 0.000
SPOT GOLD XAU 875.2 0.07% 0.650
US CRUDE CLc1 49.71 -0.54% -0.270
DOW JONES .DJI 8125.43 1.19% 95.81
ASIA ADRS .BKAS 99.14 0.02% 0.02
————————————————————-

MARKET SUMMARY
*Wall Street soars on tech bets, JPMorgan [ID:nN16262383]
*Oil rises 1.5 pct toward $50; data curbs gains [ID:nSP405814]
*Dollar, yen climb on ongoing economic worries [ID:nN16386092]
*Treasuries hit by higher stocks, supply worries [ID:nN16623259]

(Reporting by Parvathy Ullatil; Editing by Chris Lewis)

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Yen slips on short-term bets, Citi eyed

April 18, 2009 By Leave a Comment

TOKYO (Reuters) – The yen slipped against the dollar and other majors on Friday as short-term traders pushed it down, but uncertainty about economic recovery prospects left the market struggling for momentum as it also awaited results from Citigroup (C.N).

The yen had risen against the greenback and commodity currencies on Thursday after China’s 6.1 percent economic growth rate disappointed many who had bet on a faster pace.

But it failed to maintain the gains into Friday, prompting short-term speculators to push the dollar up instead, triggering dollar buy orders at higher levels and taking the likes of the Australian and New Zealand dollar up with it.

Analysts said investors remain cautious of holding positions for very long, given uncertainty about the prospects for economic recovery in the United States and other big economies, which was reinforced by mixed U.S. data on jobless claims and housing starts on Thursday. As a result day-to-day trading was choppy.

“It is speculators and intraday trading which are running the market action,” said Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney.

“But if you take a step back, we are in a very wide range overall with a very modest bias toward risk appetite on a one-month timeframe.”

The dollar, which has climbed gradually against the yen since hitting a 13-year low in January, rose 0.3 percent to 99.65 yen on Friday, after breaching support from its 200-day moving average at 98.88 on Thursday but then not staying below it.

“The dollar/yen temporarily went lower than that level but failed to close below it – this one reason why the yen’s appreciation didn’t continue,” said Toru Umemoto, chief FX strategist Japan at Barclays Capital.

With trading short-term and chart-based, the Australian dollar rose 0.3 percent to 71.80 yen and edged up 0.1 percent to $0.7203 after sliding 1 percent on Thursday.

The euro firmed 0.1 percent to 131.05 yen but slipped 0.3 percent to $1.3149.

Wall Street closed higher, with better-than-expected JP Morgan (JPM.N) results adding to hopes of bank sector stabilization but the currency market was waiting to see earnings from Citigroup expected later in the day. .N

U.S. housing starts and building permits both fell in March while continued claims for jobless benefits rose to a record high in early April as the recession bit and added to the gloom.

But Federal Reserve Bank of Atlanta President Dennis Lockhart said the U.S. recession should end by mid-year, with growth slowly picking up in the following months.

(Editing by Kazunori Takada)

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Seoul shares seen down on U.S. data, fall

April 15, 2009 By Leave a Comment

SEOUL, April 15 (Reuters) – Seoul shares are likely to fall
on Wednesday as weak retail data hurt Wall Street, with techs
likely to be under pressure after Intel Corp (INTC.O) fell
despite solid earnings after failing to give a clear revenue
forecast.

“Seoul shares will probably undergo some correction after
overnight falls in U.S. stocks, but it will not likely be
significant. We think this will be a little bump on the road to
the market’s gradual rebound, said Park So-yeon, a market
analyst at Korea Investment and Securities.

Analysts expected a limited impact from news that North
Korea ordered U.N. inspectors to leave on Tuesday after saying
it would quit international nuclear disarmament talks and
restart a plant that makes bomb-grade plutonium [ID:nSP497987].

“North Korea has more political implications than economic
implications. I do not think investors will pay much attention
to it,” said Kim Se-jung, a market analyst at Shinyoung
Securities.

Elsewhere, Daewoo Shipbuilding and Marine Engineering
(042660.KS) may be eyed after Korea Asset Management Corp, a
state debt clearer, said on Tuesday it would consider the best
time later this year to sell a stake in Daewoo Shipbuilding.
[ID:nSEO91082]

The Korea Composite Stock Price Index (KOSPI) ended
up 0.33 percent at 1,342.63 points on Tuesday.
———————-MARKET SNAPSHOT @ 2246 GMT ————

INSTRUMENT LAST PCT CHG NET CHG
S and P 500 .SPX 841.5 -2.01% -17.230
USD/JPY 98.94 0.13% 0.130
10-YR US TSY YLD 2.79 — 0.000
SPOT GOLD 889.5 0.07% 0.650
US CRUDE CLc1 49.11 -0.61% -0.310
DOW JONES .DJI 7920.18 -1.71% -137.63
ASIA ADRS .BKAS 98.16 -1.95% -1.95
————————————————————-

MARKET SUMMARY *Weak retail sales, Goldman hit Wall Street

[ID:nN14457216] *Oil slips below $50 on demand, inventory
f’casts[ID:nSP458479] *Dollar, yen gain on renewed safe-haven
bid [ID:nN14451216] *Treasuries climb on falling retail
sales data [ID:nN14581335]

STOCKS TO WATCH

KEPCO (015760.KS), POSCO (005490.KS)

State-run Korea South-East Power Corp (KOSEP), a unit of
KEPCO, said on Tuesday it would spend 3.6 trillion won ($2.7
billion) building renewable energy plants with POSCO
Engineering and Construction, a unit of POSCO until 2015.
[ID:nSEO28604]

(Reporting by Jungyoun Park; Editing by Dhara Ranasinghe)

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FOREX-Dollar and yen inch up as stocks decline

April 15, 2009 By Leave a Comment

Dollar, yen supported with global optimism tempered

* Stocks decline, dent appetite for risk

* Yen advance stemmed by Japanese corporate selling

By Shinichi Saoshiro

TOKYO, April 15 (Reuters) – The yen and the dollar inched up on Wednesday as optimism about a global economic recovery ebbed after weaker-than-expected U.S. economic data, stemming demand for other currencies.

The U.S. and Japanese units also drew support from Asian stocks on Wednesday as they tracked Wall Street lower. The U.S. stocks benchmarks slid the previous day after data showed that U.S. retails sales fell 1.1 percent in March against economists’ forecast for a 0.3 percent rise. [.N] [ID:nN14419657]

When equity prices rise, demand for currencies perceived as safe havens such as the dollar and yen have tended to wane while demand for the euro and commodity currencies such as the Australian dollar have risen. The converse has often been true.

“Given the state of the stock market, sentiment is skewed towards further gains for the yen, which has broken through recent ranges,” said a trader at a European bank.

“Corporate demand for foreign currencies has risen after the yen’s appreciation, but the recent breakthrough by the yen also presents a key yen buying opportunity for speculators,” the trader said.

The dollar was little changed at 98.99 yen after touching a near two-week low of 98.72 yen on trading platform EBS earlier.

The euro dipped 0.2 percent to 130.93 yen and shed 0.1 percent to $1.3241 EUR.

The Australian dollar fell 0.3 percent to $0.7190.

The Aussie lost 0.1 percent to 71.12 yen after hitting a six-month high of 73.49 yen the previous day.

The Aussie climbed to six-month highs against the dollar and yen earlier in the week partly on optimism that a rebound in the Chinese economy would drive demand commodities. China releases first quarter GDP data on Thursday.

Tokyo’s Nikkei stock average .N225 dropped 0.9 percent on Wednesday. [.T] U.S. stock futures SPc1 shed 0.7 percent, pointing to a lower open on Wall Street later in the day.

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