Yen eases on robust shares, positive US outlook

January 04, 2011 | 16:29

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The Japanese yen dropped against the dollar and euro in Asia on Tuesday as risk appetite increased thanks to firming global stocks and an improving US economic outlook, analysts said.

The greenback climbed to 82.10 yen in Tokyo trade from 81.70 yen in New York late Monday.

The euro rose to 109.65 yen from 109.07 yen and was flat at $1.3355.

"An overnight rise in New York stocks and strong US economic data supported the dollar," said Nobuaki Tani, a dealer at Resona Bank.

Among upbeat US data released Monday, the Institute for Supply Management reported that the nation's manufacturing activity grew for the 17th straight month in December.

"Dollar-positive sentiment on expectations of US economic recovery is likely to persist as the market awaits upcoming data such as a US employment report later this week," he told AFP.

The fresh economic indicators helped boost Wall Street stocks, which later drove up Japanese shares.

"With higher Japanese shares, investors are in risk-taking mode," Soichiro Mori, a manager at FXOnline Japan, told Dow Jones Newswires.

But dealers expect choppiness for the next several days as the overall market flow has not returned to full volume from thinner holiday trading, with some participants still on holiday.

The greenback was mixed against other Asian currencies, rising to 1.2860 Singapore dollars from 1.2855 on Monday in Singapore.

But it eased to 43.66 Philippine pesos from 43.75, to 29.09 Taiwan dollars from 29.11, to 30.04 Thai baht from 30.08, and to 8,975.00 Indonesian rupiah from 9,000.00.

Tokyo markets were closed Monday for a public holiday.

AFP

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