AFP, Tokyo :
The dollar declined against the yen on Wednesday on expectations a US interest rate rise will be delayed while demand for safer assets increased on the back of volatile oil prices and worries about China’s economy.
Concerns about the slowdown of Chinese growth kept the pressure on investors who, spooked by Tuesday’s disappointing trade data and another weak inflation reading Wednesday, shifted into lower yield assets considered safer bets. The greenback was at 119.68 yen compared with 119.72 yen on Tuesday in New York, after trading at 119.58 yen in early exchanges. The move into safety follows a July-September quarter that saw trillions wiped off valuations owing to China’s economic malaise and expectations the Federal Reserve would raise interest rates.
A sustained recovery in risk appetite could likely take time, analysts said. “Risk aversion is prompting the buying back of funding currencies such as the euro,” Akira Moroga, manager of currency products at Aozora Bank, told Bloomberg News. “Among the majors, the yen, the euro and dollar are bought, in that order.”
The euro was flat at 136.26 yen, while it edged up to $1.1385 from $1.1381 in US trade.
The dollar had been rallying for most of the year on expectations the Fed would gradually start raising interest rates.
However, central bank policy makers have turned dovish in recent weeks — helping emerging markets currencies — owing to turmoil on global markets caused by the China crisis.
The dollar declined against the yen on Wednesday on expectations a US interest rate rise will be delayed while demand for safer assets increased on the back of volatile oil prices and worries about China’s economy.
Concerns about the slowdown of Chinese growth kept the pressure on investors who, spooked by Tuesday’s disappointing trade data and another weak inflation reading Wednesday, shifted into lower yield assets considered safer bets. The greenback was at 119.68 yen compared with 119.72 yen on Tuesday in New York, after trading at 119.58 yen in early exchanges. The move into safety follows a July-September quarter that saw trillions wiped off valuations owing to China’s economic malaise and expectations the Federal Reserve would raise interest rates.
A sustained recovery in risk appetite could likely take time, analysts said. “Risk aversion is prompting the buying back of funding currencies such as the euro,” Akira Moroga, manager of currency products at Aozora Bank, told Bloomberg News. “Among the majors, the yen, the euro and dollar are bought, in that order.”
The euro was flat at 136.26 yen, while it edged up to $1.1385 from $1.1381 in US trade.
The dollar had been rallying for most of the year on expectations the Fed would gradually start raising interest rates.
However, central bank policy makers have turned dovish in recent weeks — helping emerging markets currencies — owing to turmoil on global markets caused by the China crisis.
