TOKYO: The dollar eased in Asia Tuesday because weak Chinese growth data rekindled concerns about the global economy.
Credit Agricole said, “Any indication of further weakening export growth is likely to come to the benefit of (Bank of Japan) easing expectations. “This, combined with further improving risk sentiment should keep the yen a sell on rallies.”
In Tokyo afternoon trading, the greenback fell to 106.40 yen from 106.92 yen in New York. The euro rose to $1.2820 from $1.2800, while it weakened to 136.54 yen from 136.86 yen. The yen, seen as a safe bet in times of uncertainty, after China said its economy expanded 7.3 percent year-on-year in July-September, its slowest since 2008 at the depths of the global financial crisis. The third-quarter figure announced was lower than the 7.5 percent expansion in the previous three months, although it exceeded the median forecast of 7.2 percent in a survey of 17 economists.
Investors will now turn their attention to US home sales later in the day and Japanese trade data Wednesday. The dollar has tumbled in recent weeks on worries about the global economy and fears about the spread of the deadly Ebola virus. But Taisuke Tanaka, chief forex strategist at Deutsche Bank in Tokyo, said the losses would likely be short-lived.
“We have not changed our view that the dollar-yen (rate) will try to go above 110 within a month or two,” Tanaka said. The dollar was mostly weaker against other Asia-Pacific currencies.
