Dollar Firms in Asia, Turkish Lira Edges Up
The dollar made up a little of its lost ground in Asian trade Thursday afternoon after falling when the U.S. central bank said it would continue to scale back its bond-buying program.
The greenback firmed to 102.40 yen, compared with 102.25 yen in New York Wednesday afternoon and against 103.25 yen in Asia on Wednesday, before the Fed announcement.
The move sent Tokyo stocks tumbling more than three percent Thursday before recovering slightly to end down 2.45 percent.
The euro also inched up to 139.76 yen from 139.71 yen in U.S. trade while it weakened to $1.3646 against $1.3662.
The yen tends to be bought in times of global uncertainty due to its safe-haven status.
The recent selloff in emerging currencies including the Turkish lira had prompted selling of the greenback against the Japanese unit.
Dealers said the dollar strengthened against the yen in afternoon trade as short-term operators were buying back the lira, suggesting a gradual recovery in risk appetite, Dow Jones Newswires, reported.
But whether or not the lira would hold onto its gains was unclear.
"Trading of the Turkish lira is extremely thin in Asia, so we need to see how it will fare in the London market," Toshihiko Sakai, senior FX manager at Mitsubishi UFJ Trust and Banking Co, said.
"The Fed's tapering program implies higher U.S. interest rates, a stronger dollar and a weaker yen -- all of which are fundamentally positive for Japan stocks," Yoshihiro Okumura, general manager at Chibagin Asset Management, said earlier.
But "the 'risk-off' investor mood and jolt to the world's growth markets is trumping these facts," he said, according to Dow Jones Newswires.
The Fed said Wednesday the U.S. economy was growing firmly enough to further trim its colossal stimulus, which will shrink to $65 billion a month from February, spelling a steady tightening of global financial conditions.
Investors took flight after the announcement, which stoked fears of a capital shift from emerging markets as dealers look for safer investments back home.
Sharp interest rate hikes by Turkey and South Africa on Wednesday failed to stem heavy losses in their currencies resulting from these outflows.
Russia, Brazil and Argentina also faced further falls in their units, despite the International Monetary Fund stressing there was not a general panic and that each faces specific challenges.
The dollar was higher against other Asia-Pacific currencies.
It rose to 12,215 Indonesian rupiah from 12,145 rupiah on Wednesday, to 62.75 Indian rupees from 62.17 rupees, and to Tw$30.36 from Tw$30.25.
The greenback also gained to 45.34 Philippine pesos from 45.13 pesos, to 1,079.95 South Korean won from 1,069.50 won, to Sg$1.2767 from Sg$1.2728, and to 32.99 Thai baht from 32.90 baht.
The Australian dollar eased to 87.28 U.S. cents from 88.05 cents, while the Chinese yuan fetched 16.90 yen against 17.05 yen.
Source: Agence France Presse
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