Dollar falls versus yen following strong GDP data from Japan

The Associated Press ,  Tokyo   |  Fri, 05/16/2008 7:28 PM  |  Business

The dollar weakened Friday in Asia as the yen got a big boost from a report showing healthy economic growth in Japan.

Data from the Cabinet Office showed Friday that Japan's gross domestic product -- or the value of a nation's goods and services -- grew 0.8 percent on quarter in the January-March period, equivalent to an annual rate of 3.3 percent.

The data quickly sent the dollar lower, and midafternoon it traded at 104.67 yen, down from 104.76 yen late Thursday in New York. The euro, meanwhile, rose to US$1.5486 from US$1.5449.

Traders, however, said the yen's rise may be short-lived amid Japan's low interest rates and murky economic outlook.

"The GDP data put the markets in a yen-buying mood," said Seiichiro Muta, director of foreign exchange in Tokyo at UBS. But yen buying was limited because of weak business investment in the latest quarter, he said.

Economists shrugged off the data, saying a sliding U.S. economy and the soaring costs of imported oil and other materials could drag Japan's economy lower in the coming quarters.

Investors were now shifting their focus to U.S. housing starts data for March, set for release later Friday. European Central Bank President Jean-Claude Trichet will also speak at an economic forum, and U.S. Treasury Secretary Henry Paulson in Washington will give an update on the housing and credit markets.

The dollar was mainly lower against other Asian currencies.

The greenback lost 0.11 percent against the Indonesian rupiah to Rp 9,285, and fell 0.24 percent against the Singapore dollar to S$1.3727. The dollar also fell 0.61 percent against the Taiwan dollar to NT$30.688. (****)

A  |   A  |   A  |    |   |    |    |    |  

Copyright © 2008 The Jakarta Post - PT Bina Media Tenggara. All Rights Reserved.