By Hiroyuki Kachi
The dollar was essentially flat against the yen and the euro, as
investors remained cautious and avoided taking strong, lopsided
positions ahead of the March 31 end of the Japanese fiscal
year.
Around 0450 GMT, the dollar was at Y119.16, compared with
Y119.18 late Thursday in New York. Meanwhile, the euro was at
$1.0886 from $1.0885.
Tensions in the Middle East, stemming from Saudi Arabia and its
allies' launch of a military campaign in neighboring Yemen, seemed
to have eased.
But the greenback has found itself top heavy during Asian trade,
as investors remain cautious about possible turbulence that could
drag down the dollar again the yen ahead of the book closing.
Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan
Stanley, said dollar selling pressure could emerge in the form of
position adjustments by short-term players or repatriation of
profits by Japanese corporate investors or financial
institutions.
"Basically, that may make the topside heavier and the downside
softer," said Mr. Ueno, adding that investors "can't let down their
guard over a higher yen until the New York closing Tuesday next
week."
"At a time when many remain uncertain about what kind of
turbulence is going on ahead of the end of the term, there will be
few investors trying to test upside," said Mr. Ueno. Rather,
investors are more likely to wait until the release of the upcoming
U.S. jobs data scheduled to come out April 3.
Still, Mr. Ueno said he expects dip-buying bids around the lower
half of Y118, making downside limited.
Fears about the dollar's downside against the yen have receded
partly because fears about the Yemen crisis didn't heat up, but
"it's premature to conclude that sentiment has turned bullish,"
said Takuya Kanda, senior researcher at Gaitame.Com Research
Institute in a note.
Mr. Kanda, however, said upside resistance points on technical
charts lie at around Y119.90, Y120.15 and Y120.40.
Currency markets had a muted reaction to Japan's economic data
earlier Friday.
Government data released Friday showed that the on-year growth
in the core consumer price index--stripping out volatile fresh-food
prices and an increase in the sales tax last year--slid to zero in
February, its lowest level in nearly two years.
Investors now await speech by Federal Reserve Chairwoman Janet
Yellen and U.S. gross domestic product data later Friday.
Among other currency pairs, the common currency was at Y129.74
from Y129.75.
The WSJ Dollar Index, a measure of the dollar against a basket
of major currencies, was up 0.02% at 81.97.
Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 119.16-17 119.19-20 -0.03 119.40 119.06 -0.47
EUR/USD Euro 1.0886-89 1.0884-87 +0.02 1.0897 1.0866 -10.01
GBP/USD U.K. 1.4851-56 1.4847-52 +0.03 1.4869 1.4843 -4.65
USD/CHF Switzerland 0.9641-45 0.9627-31 +0.15 0.9649 0.9624 -3.02
USD/CAD Canada 1.2501-06 1.2480-85 +0.17 1.2507 1.2469 +7.59
AUD/USD Australia 0.7798-802 0.7827-31 -0.37 0.7836 0.7791 -4.54
NZD/USD New Zealand 0.7576-82 0.7595-601 -0.25 0.7610 0.7567 -2.77
Euro Rates
EUR/JPY Japan 129.70-74 129.71-75 -0.01 129.88 129.49 -10.50
Source: ICAP PLC
Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com