US dollar dips back below 81 yen in Asian trade

March 22, 2011 | 11:26

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The dollar fell below 81 yen in Asian trade Tuesday as investors cashed in after the US unit broke above the key level in the previous session, analysts said.

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The greenback bought 80.93 yen in morning Asian trade, compared with 81.07 in New York late Monday, while the euro rose to 115.14 yen from 114.65.

The European single currency was unchanged at $1.4226.

Analysts said the yen weakened as traders withdrew their positions after the dollar crossed the 81-yen threshold on Monday.

"They're retreating after hitting a technical level... markets are pulling back a bit," said Philip Wee, senior currency economist with DBS Group Research in Singapore.

However, Wee told AFP he believed the yen would not be able to maintain its strength as Asian bourses posted gains on hopes that emergency crews would avert a meltdown at a Japanese nuclear plant.

"The move will be limited because everyone is still looking at the stock market," he said.

Tokyo on Tuesday threatened a further yen-selling intervention by the Group of Seven leading industrialised nations, saying joint action was not limited to last week's coordinated move.

The yen's strength came despite the Bank of Japan on Tuesday injecting two trillion yen ($24.67 billion) into markets as it continued its emergency fund provision following the devastating march 11 earthquake and tsunami.

It has now injected a total of 39 trillion yen to soothe sentiment and ease concerns about the ability of financial institutions to meet demand for funds.

AFP

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