May 15, 2014 1:00 pm JST

Dollar moves narrowly in 101 yen, pressured by lower Treasury yields

TOKYO (Kyodo) -- The U.S. dollar moved narrowly in the upper 101 yen zone in Tokyo on Thursday morning, after dropping from the lower 102 yen range overnight in overseas trading, pressured by lower U.S. Treasury yields.

     At noon, the dollar fetched 101.82-84 yen compared with 101.86-96 yen in New York and 102.10-11 yen in Tokyo at 5 p.m. Wednesday.
The euro was quoted at $1.3720-3720 and 139.69-72 yen against $1.3710-3720 and 139.71-81 yen in New York and $1.3716-3717 and 140.04-08 yen in Tokyo late Wednesday afternoon.

     The dollar moved horizontally in the morning after dropping from the lower 102 yen zone in overseas trading overnight with 10-year Treasury yields reaching their lowest point in around six months, said Yuzo Sakai, manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow.

     "For now, if U.S. bond yields don't bounce back, neither can the dollar, even if the various U.S. economic indicators due out tonight show strength in the economy," Sakai said.

     The Cabinet Office said in the morning that Japan's gross domestic product grew at an annualized rate of 5.9 percent in the January-March quarter, but the data failed to move the market significantly as most had expected a lofty figure amid rush business activity ahead of April's consumption tax hike, he added.

     The euro held stable against the dollar and yen after falling earlier in the week on expectations the European Central Bank will cut interest rates and possibly introduce quantitative monetary easing at its policy meeting next month to ward off eurozone deflation, Sakai said.

     "But we can't rule out more euro selling in overseas trading time tonight, particularly if the (January-March flash) GDP data is soft as this would put further pressure on the ECB to ease," he said.