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Dollar rises against yen on reassurance from finance chief

The US dollar inched up against the yen in Asia on Friday as Japan's finance minister said that the yen's exchange rate was in line with economic fundamentals.

The dollar rose against the Japanese currency, edging up to ¥121.29 from ¥121.26 late on Thursday.

Comments by Japanese Finance Minister Koji Omi, coming on the heels of the Bank of Japan's decision on Thursday not to raise interest rates, made investors feel even safer selling the yen, some traders said.

Looking ahead, traders said the yen's weakness is nowhere near its bottom.

"Yen-carry trades are regaining steam," with investors selling the Japanese unit to buy other currencies bearing higher interest, such as the euro, sterling and the Australian dollar, said Osao Iizuka, head of foreign-exchange trading at Sumitomo Trust & Banking.

Trading became subdued in late Asian hours as dealers awaited the release of US consumer sentiment data and planned speeches by Federal Reserve officials later in the global day, dealers said.

The New Taiwan dollar traded lower against the greenback on Friday because of US dollar buying from oil firms and insurers, traders said.

The local currency dropped NT$0.018 to close at NT$32.810 against the US dollar on Taipei Forex Inc. Turnover was US$889 million, compared with US$974 million the previous day.

The US dollar was little changed against other major currencies on Friday.

In afternoon New York trading, the euro bought US$1.2965, up slightly from US$1.2959 late on Thursday in New York. The British pound inched up to US$1.9737 from US$1.9733.

The Labor Department on Thursday reported that consumer prices rose 2.5 percent last year, the smallest rise since 2003, when prices gained by 1.9 percent.

The data may signal to the Fed that it has achieved its goal of containing inflation while maintaining a growing economy, and that there may be no need for a change in credit policy at its January meeting.

The central bank has kept interest rates unchanged at 5.25 percent since August last year after a more than two-year string of hikes to combat inflation.

In other New York trading, the US dollar bought 1.2477 Swiss francs, down from SF1.2480 late on Thursday, and C$1.1714, down from C$1.1728.
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