U.S. Dollar Continues to Struggle against Yen, Striking 2-month Low in Asia

By: Barbara Zigah

Institutional investors in Japan are selling off their holdings in the U.S. Dollar following the recent release of weak economic data from the United States bring the greenback to a new 2-month low versus the Japanese Yen. At one point in today’s trading session in Asia, the U.S. Dollar slipped against the Yen to 88.08 Yen, the lowest price since early May, and many investors see it continue to drop throughout the remainder of the week. One dealer in Japan says the bulk of selling is being done by Japanese exporters, though hedge fund operators and banks are also significantly cutting their U.S. Dollar holdings. As reported at 2:50 p.m. (JST) in Tokyo, versus the Japanese Yen, the U.S. unit was trading at 88.26 Yen, off from yesterday’s trade of 88.43 Yen in New York.

Later today, the U.S. manufacturing report will be released; traders confirm that if the readings are weaker than anticipated, the yields on U.S. Treasury instruments will go lower, spurring increased demand for the Japanese Yen, a safe-haven currency. A recent poll of economists forecasts a deterioration of the data last month. The U.S. Dollar Index, which measures the greenback’s value versus other major currencies, was trading at 86.140 .DXY.