The dollar weakened against the yen Friday on persistent doubts about the strength of an economic recovery in the United States, while Asian shares gained ground to push a regional index to a three-year high.
Foreign exchange traders were wary of intervention by Japanese authorities as the dollar struggled below 111 yen. By 0600 GMT the dollar was at 110.81 yen a little over a half yen from three-year lows, with traders cautious ahead of the closely watched U.S. employment report for September due out at 1230 GMT.
"As we near 110 yen, the market naturally gets anxious about possible intervention," said Junya Tanase, global markets officer at JP Morgan Chase in Tokyo.
The euro was steady at $1.1696, near three-month highs around $1.1770.
Japan's Nikkei average ended up 1.09 percent at 10,709.29, while MSCI's dollar-based index of Asian markets outside of Japan was 0.47 percent higher at a new three-year peak. A rise in oil prices in New York lured investors to mineral and oil producers such as Japan's Teikoku Oil Ltd., which was up 4.32 percent. But profit-taking hit Japanese real estate and insurance firms, which had ratcheted higher this week on hopes for a steady recovery in the Japanese economy.
NYMEX crude oil futures inched higher in Asia as the market became wary about chasing prices aggressively beyond $30 after the Kuwaiti oil minister said OPEC may not need to tighten production extensively.
After rising to a one-month high of $29.98, the November contract was up one cent at $29.84 a barrel.
"The market is expecting to test $32, but recent rises have clearly been too rapid," said Koji Suzuki, manager at Tokyo-based brokerage Itochu Futures Corp.
FOLLOWING WALL STREET
The minor gains on most Asian share markets mirrored Wall Street, where the Dow Jones, the Nasdaq and the S&P indices were all about two-tenths of a percent higher.
Singapore's Straits Times Index gained 1.47 percent after news of an IPO for Belgian telecoms operator Belgacom, 12.15 percent owned by Singapore Telecommunications
Hong Kong-based global clothing retailer Esprit Holdings Ltd. fell 6.75 percent after its chairman agreed to sell part of his stake in the firm. But the benchmark Hang Seng Index managed to finish the morning up 0.64 percent at 11,620.09, helped by a 3.06 percent gain in Bank of China Hong Kong.
Taiwan's main TAIEX gained 0.84 percent to 5,747.79. South Korean markets were on holiday.
Gold was slightly higher, mainly driven by strength in the yen. But dealers said the bullion market was cautious ahead of the release of the U.S. employment report. Spot gold was trading at $383.30 an ounce.
BETTING ON YUAN APPRECIATION
Chinese yuan non-deliverable forwards were dealt at a record premium to the U.S. dollar, pricing in an appreciation of over five percent in the heavily managed currency in a year's time.
One-year yuan NDFs were dealt at a record 4,000 points premium to the dollar in morning trade, and later rose as far as 4,200 points. The domestic Chinese markets were closed for a holiday.
Non-deliverable forward contracts are based on the price movements of an underlying currency but are settled in dollars.
Analysts said the U.S. dollar's sharp drop in recent weeks against major currencies, such as the yen and euro, in response to last month's Group of Seven meeting, as well as against other currencies in Asia was putting pressure on the dollar in yuan forwards.
China manages the yuan in a 8.2760/8.2800 per dollar range, which the United States and Europe have criticized as too weak and giving China an unfair trade advantage. The NDF rise priced the yuan at about 7.858 per dollar in one year.
Foreign exchange traders were wary of intervention by Japanese authorities as the dollar struggled below 111 yen. By 0600 GMT the dollar was at 110.81 yen a little over a half yen from three-year lows, with traders cautious ahead of the closely watched U.S. employment report for September due out at 1230 GMT.
"As we near 110 yen, the market naturally gets anxious about possible intervention," said Junya Tanase, global markets officer at JP Morgan Chase in Tokyo.
The euro was steady at $1.1696, near three-month highs around $1.1770.
Japan's Nikkei average ended up 1.09 percent at 10,709.29, while MSCI's dollar-based index of Asian markets outside of Japan was 0.47 percent higher at a new three-year peak. A rise in oil prices in New York lured investors to mineral and oil producers such as Japan's Teikoku Oil Ltd., which was up 4.32 percent. But profit-taking hit Japanese real estate and insurance firms, which had ratcheted higher this week on hopes for a steady recovery in the Japanese economy.
NYMEX crude oil futures inched higher in Asia as the market became wary about chasing prices aggressively beyond $30 after the Kuwaiti oil minister said OPEC may not need to tighten production extensively.
After rising to a one-month high of $29.98, the November contract was up one cent at $29.84 a barrel.
"The market is expecting to test $32, but recent rises have clearly been too rapid," said Koji Suzuki, manager at Tokyo-based brokerage Itochu Futures Corp.
FOLLOWING WALL STREET
The minor gains on most Asian share markets mirrored Wall Street, where the Dow Jones, the Nasdaq and the S&P indices were all about two-tenths of a percent higher.
Singapore's Straits Times Index gained 1.47 percent after news of an IPO for Belgian telecoms operator Belgacom, 12.15 percent owned by Singapore Telecommunications
Hong Kong-based global clothing retailer Esprit Holdings Ltd. fell 6.75 percent after its chairman agreed to sell part of his stake in the firm. But the benchmark Hang Seng Index managed to finish the morning up 0.64 percent at 11,620.09, helped by a 3.06 percent gain in Bank of China Hong Kong.
Taiwan's main TAIEX gained 0.84 percent to 5,747.79. South Korean markets were on holiday.
Gold was slightly higher, mainly driven by strength in the yen. But dealers said the bullion market was cautious ahead of the release of the U.S. employment report. Spot gold was trading at $383.30 an ounce.
BETTING ON YUAN APPRECIATION
Chinese yuan non-deliverable forwards were dealt at a record premium to the U.S. dollar, pricing in an appreciation of over five percent in the heavily managed currency in a year's time.
One-year yuan NDFs were dealt at a record 4,000 points premium to the dollar in morning trade, and later rose as far as 4,200 points. The domestic Chinese markets were closed for a holiday.
Non-deliverable forward contracts are based on the price movements of an underlying currency but are settled in dollars.
Analysts said the U.S. dollar's sharp drop in recent weeks against major currencies, such as the yen and euro, in response to last month's Group of Seven meeting, as well as against other currencies in Asia was putting pressure on the dollar in yuan forwards.
China manages the yuan in a 8.2760/8.2800 per dollar range, which the United States and Europe have criticized as too weak and giving China an unfair trade advantage. The NDF rise priced the yuan at about 7.858 per dollar in one year.
3287.99
1275.09