By Hiroyuki Kachi
Euro weakens as Greece says it's out of money
The dollar inched up against the yen, coming closer to hitting
its year high in Asian trade Monday, with the greenback extending
its gains following upbeat U.S. inflation data and comments by
Federal Reserve Chairwoman Janet Yellen Friday.
The euro meanwhile fell after Greek leaders said the country
won't make InternationaI Monetary Fund repayments that are due in
June.
The U.S. currency (USDJPY) touched as high as Yen121.78 before
slightly weakening to Yen121.67 around 0250 GMT. That is higher
compared with Yen121.55 late Friday in New York.
Getting a boost from upbeat U.S. inflation and Yellen's remarks,
the dollar's uptick to its year high of Yen122.04 set on March 10
has now come into sight.
U.S. core inflation in April, excluding volatile food and energy
prices, showed the biggest gain since January 2013, while Yellen
said the central bank is on track to raise interest rates sometime
this year.
Read: Yellen, unmoved by soft data, expects rate hikes this year
(http://www.marketwatch.com/story/yellen-unmoved-by-soft-data-says-she-expects-rate-hike-this-year-2015-05-22)
A solid gain in the Nikkei Stock Average gave a support to the
dollar by allowing selling of the yen, perceived as a safe asset.
The benchmark index rose 0.7% midday.
But investors found it difficult to make any major moves, with
many overseas investors away on holiday and a lack of fresh trading
cues. Financial markets are closed elsewhere in the world including
the U.S. for Memorial Day and the U.K. for Spring Bank Holiday.
"Investors were scared of heights," when the dollar hit its year
high in March, said Daisaku Ueno, chief FX strategist at Mitsubishi
UFJ Morgan Stanley.
But after confirming solid downside support around Yen118 and
Yen119, later in the year and then with "investors' eyes accustomed
to stay around Yen120" in recent session, the dollar is now
positioned better to try its upside against the yen, said Ueno.
Investors showed a muted reaction to Japan's merchandise trade
balance for April released earlier Monday by the government.
A month after its first surplus in nearly three years, the
world's third largest economy logged a YenY53.4 billion
deficit.
The euro (EURUSD) fell to $1.0993 from $1.1017, while the common
currency was at Yen133.68 from YYen133.83. Greece said Sunday that
it won't have the money it must repay to the International Monetary
Fund next month unless it strikes a deal with international
creditors over further rescue funding.
"This money will not be given," Interior Minister Nikos Voutsis
told privately owned television station Mega
(http://www.marketwatch.com/story/greece-wont-meet-imf-repayments-in-june-interior-minister-says-2015-05-24),
on Sunday. "It does not exist."
Also see: German finance minister sees no need to discuss
'alternatives' on Greece
(http://www.marketwatch.com/story/german-finance-minister-sees-no-need-to-discuss-alternatives-on-greece-2015-05-24)
The WSJ Dollar Index, a measure of the dollar against a basket
of major currencies, was up 0.03% at 86.23.
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