The US dollar rose against the yen but fell versus the euro on Friday as the market digested a stronger-than-expected report on Japanese economic growth and mulled the path of US interest rates. The euro edged up to US$1.1934 at 10pm GMT from US$1.1900 in New York late on Thursday.
The US dollar rose to ¥118.04 from ¥117.62 on Thursday.
With attention focused on the yen, Japan's Cabinet Office said the economy grew at a faster-than-expected 1.4 percent in the fourth quarter, an annualized rate of 5.5 percent, fueled by robust corporate spending and housing investment.
But the market focused on the GDP deflator, a key gauge of the level of deflation, which fell 1.6 percent, the 31st consecutive quarterly decline.
Traders took this "as a sign that the Bank of Japan may not shift policy as soon as the market had been expecting," Jon Gencher at BMO Nesbitt Burns said.
In the US, results from the University of Michigan survey showed the consumer sentiment index dropping unexpectedly to 87.4 this month from 91.2 last month, well below forecasts for a flat reading of around 91.1.
"The surprising fall in the Michigan US consumer confidence index in February is a note of caution that, despite the flying start to the first quarter, the outlook for consumer spending remains shaky," Keith Gyles at Capital Economics said.
The US dollar had staged a tentative but short-lived rally earlier in the day after the latest US producer price index report came in above expectations.
Headline wholesale prices rose by 0.3 percent last month and core prices by 0.4 percent, both above expectations for rises of 0.2 percent.
"The larger-than-expected rise in [the] headline and core PPI helped to reinforce the view that the Fed will continue raising interest rates at its next two meetings," said Michael Woolfolk, senior currency strategist at Bank of New York. "Nonetheless, the core inflationary data remains particularly benign."
Ronald Simpson, analyst at Action Economics, noted that the dollar failed to hold its gains because on a year-over-year basis, the core PPI last month was up 1.5 percent, slower than the 1.7 percent year-over-year gain seen in the December report.
"The bond market more or less took the PPI as good news," he said. "Yields have declined as a result, and the lower yield does not help the dollar at all."
US markets are closed tomorrow for the Presidents Day public holiday.
After that, attention will turn to the minutes to the last US Federal Reserve rate-setting meeting on Jan. 31, to be released on Tuesday, followed by the release of US inflation data on Wednesday and durable goods orders on Thursday.
In late New York trade, the US dollar stood at 1.3103 Swiss francs from SF1.3100 on Thursday.
The pound was being traded at US$1.7410 after US$1.7393 late on Thursday. The US dollar shed NT$0.011 against the New Taiwan dollar in Taipei on Friday to close at NT$32.390.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to