Following Bernanke Testimony, U.S. Dollar Slips Against Yen in Asian Trading

By: Barbara Zigah

Following the testimonial remarks of Ben Bernanke, the Chairman of the U.S. Federal Reserve Bank, to the U.S. Congress’s Banking Committee, the U.S. Dollar fell in Asian trading on renewed investor concern over the pace of the American economic recovery. According to Mr. Bernanke, there remains “unusually uncertain” prospects ahead for the economy, and that statement, more than any other, prompted investors to buy government instruments and sell off their equity holdings.

As reported at 2:19 p.m. (JST) in Tokyo, the U.S. Dollar slipped against the Japanese Yen to 86.47 Yen, a loss of .7% and continuing the losses experienced yesterday when the greenback slipped .5%. Some market players suggest that the U.S. Dollar may fall quickly when it breaks through the 7-month low of 86.27 Yen, a price struck last week. One forex strategist in Tokyo, however, doesn’t believe that Bernanke’s commentary offered anything new so he doesn’t foresee the Dollar/Yen falling below the recent low. Any gain in the Yen may be limited, however, as Japanese authorities continue to hint that they may intervene if the Yen looks to appreciate too much.

The Euro also gained against the U.S. Dollar, rising .2% to trade at $1.2781. Yesterday, immediately following Bernanke’s comments, the Euro slipped almost 1% on risk aversion, but the Euro appears to be steadying now as the markets await the outcome of the European bank stress tests. On Tuesday, the Euro rose to a 10-week peak against the greenback, trading at $1.30.