TOKYO - The dollar rebounded in Asia Thursday after suffering a sell-off in New York on remarks from Federal Reserve chief nominee Janet Yellen that indicated the bank will keep its stimulus programme in place for the time being.
The greenback rose to 99.67 yen in Tokyo afternoon trade, from 99.14 yen in New York late Wednesday. The euro weakened to $1.3470 from $1.3492 while it changed hands 134.21 yen against 133.73 yen. In comments prepared for a Senate hearing on Thursday, Yellen signalled her support for continuing the central bank’s $85 billion-a-month bond-buying until the world’s biggest economy shows signs of a firm recovery. She said unemployment at 7.3 percent was too high and reflected an economy running “far short” of its potential. That sent the dollar tumbling in US trade as continued bond-buying pumps vast sums of cash into financial markets, lowering demand for the unit.
When unveiling the scheme in September last year the Fed said it would only start winding it down when the economy was strong enough.
“Her prepared opening testimony was used as a factor to sell the dollar, but we want to know about what she will say following the opening remarks,” said Daisuke Karakama, market economist at Mizuho Bank’s forex unit.
The yen’s decline supported Tokyo stocks, which rose 1.40 percent by the break. The Nikkei was also lifted by above-view Japanese third-quarter growth data.
“The yen’s decline was mainly due to a market reaction to a rise in the Nikkei,” Karakama said.
A recent rate cut by the European Central Bank to ward off signs of deflation in the hard-hit eurozone supplied a “good reason to sell euros”, a senior trader at a Japanese bank told Dow Jones Newswires.
The dollar was weaker against other Asia-Pacific currencies.
It fell to Sg$1.2463 from Sg$1.2495 on Wednesday, to 63.04 Indian rupees from 63.73 rupees, and to 43.73 Philippine pesos from to 43.77 pesos.
The greenback also edged down to 31.55 Thai baht from 31.59, and to 1,068.02 South Korean won from 1,072.93 won.
It was a tad up at TW$29.60 from Tw$29.59.
The Australian dollar firmed to 93.45 US cents from 93.04 US cents, while the Chinese yuan was at 16.36 yen against 16.30 yen.