TOKYO (Dow Jones)--The dollar fell against the yen in Asia Monday, as Japanese exporters took profits on Friday's sharp rise in the greenback on the back of stronger-than-expected U.S. employment data.
The dollar fell about three-fourths of a yen to an intraday low of Y89.76 Monday, compared with Y90.50 in New York late Friday. At 0450 GMT, the dollar stood at Y89.84.
Traders said the dollar could fall further if Japanese manufacturers keep selling dollars ahead of their planned book-closing at the end of December, or if long-term interest rates in the U.S. increase, hurting the nation's stock markets and economic growth.
"Because many Japanese companies have set their in-house foreign exchange rate at the Y90 mark, there seems persistent dollar-selling pressure around that level," said Yuzo Sakai, a foreign-exchange manager at Tokyo Forex & Ueda Harlow.
Although Friday's U.S. jobs data added to signs that the U.S. economy is improving, Sakai said the dollar could fall to as low as Y89.50 in the near term.
Foreign exchange market participants are also paying close attention to the U.S.'s planned auctions of government securities this week. Weak demand for bonds could lift long-term U.S. rates, which could darken the outlook for the U.S. economy and possibly dent demand for the dollar, dealers said.
"The dollar may come under even stronger selling pressure if the U.S. bond market sees a bad rise in long-term yields due to oversupply concerns," and if such yield gains cause U.S. share prices to fall, said Yuji Saito, head of foreign exchange at Societe Generale.
The U.S. government is slated to auction $40 billion worth of three-year notes on Tuesday, $21 billion in 10-year notes Wednesday and $13 billion in 30-year bonds Thursday. The 10-year U.S. Treasury yield stood at 3.474% as of 0450 GMT.
While most dealers expect the dollar to fall in coming days, some in the market warn that the greenback could get a boost if U.S. Federal Reserve chairman Ben Bernanke sounds optimistic about the nation's economic outlook in his planned speech later in the global day. Bullish remarks from the Fed chairman could fuel speculation that the bank may change its super-easy monetary policy stance, possibly lifting its policy rate by the end of June, those dealers said.
Meanwhile, cross-trading pressure from the dollar's decline against the yen caused the euro to fall against the Japanese currency. The single currency touched an intraday low of Y133.68 compared with Y134.29 late Friday in New York.
However, the common unit was slightly higher against the dollar at $1.4890, compared with $1.4847 in New York.
Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates 2150 GMT High Low 12/31
USD/JPY Yen 89.84-89 90.27-33 -0.48 90.38 89.77 -0.84
EUR/USD Euro 1.4890-94 1.4851-53 +0.26 1.4898 1.4852 +6.52
GBP/USD Sterling 1.6482-86 1.6424-30 +0.35 1.6505 1.6425 +12.69
USD/CHF Swiss Franc 1.0143-47 1.0165-71 -0.22 1.0173 1.0142 -4.93
USD/CAD Canadian Dlr 1.0553-56 1.0562-65 -0.09 1.0578 1.0534 -13.25
AUD/USD Australian Dlr 0.9157-59 0.9132-35 +0.27 0.9171 0.9116 +29.46
NZD/USD New Zealand Dlr 0.7173-78 0.7150-55 +0.32 0.7188 0.7147 +22.93
EUR/JPY Yen 133.79-84 134.05-09 -0.19 134.35 133.68 +5.65
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