Dollar eases in Asia after US inflation rally
The dollar eased Friday after rallying on inflation data that pointed to rising price pressures in some areas of the US economy, which could ease the way for the Fed to hike interest rates.
In Tokyo, the dollar weakened to 119.17 yen from 119.42 yen in New York, although it was still higher than 118.97 yen seen in Tokyo earlier Thursday.
The euro rose to $1.1213, from $1.1198, but it slipped to 133.62 yen from 133.72 yen in US trade.
While falling crude-oil prices continued to dampen overall US inflation, data from the US Labor Department on Thursday revealed growing pressures in a number of areas, including shelter and personal care.
"The sharp recovery in the US dollar during last night's offshore trade was primarily the result of US inflation data," National Australia Bank said in a commentary.
Deutsche Bank strategist Daniel Brehon said the tepid data could still spur hopes for a rate hike, which is a plus for the dollar.
"Given that inflation surprises have been negative around the world, anything above consensus is a sign for optimism and a sign for higher rates in the US," he told Bloomberg News.
Markets have been rife with speculation over when exactly this year the US central bank will start raising interest rates.
But, in two days of testimony to the US Congress, Fed chief Janet Yellen said the central bank was in no rush and was seen to rule out a move before June.
The yen was mixed after official data showed that Japan's inflation rate has fallen to its lowest since May 2013 to a level last seen just after Tokyo launched an offensive aimed at conquering years of deflation and disappointing growth.
Adjusted for a sales tax hike last year, it rose just 0.2 percent on-year, the lowest since a zero percent rate in May 2013 and well short of the Bank of Japan's much-touted 2.0 percent inflation goal.
The disappointing official price data challenges BoJ governor Haruhiko Kuroda's claims that inflation is on an uptrend, and boost the chances that the BoJ will unleash more stimulus to counter the downturn, which would tend to weaken the yen.
Kuroda, however, told a news conference Friday afternoon: "As the effects of the decline in crude oil prices on a year-on-year basis dissipate, the two percent inflation is likely to be achieved."
The dollar was mixed against other Asia-Pacific currencies.
It slipped to 44.08 Philippine pesos from 44.09 pesos on Thursday, to 1,098.90 South Korean won from 1,099.98 won, to 61.82 Indian rupees from 61.95 rupees and to 32.36 Thai baht from 32.44 baht.
But the greenback rose to 12,886.90 Indonesian rupiah from 12,866.00 rupiah, to Sg$1.3570 from Sg$1.3535 and to Tw$31.47 from Tw$31.44.
The Australian dollar declined to 77.94 US cents from 78.56 cents, while the Chinese yuan was unchanged at 19.00 yen.
