12:02 pm | Monday, September 29th, 2014
AP FILE PHOTO
TOKYO – The dollar advanced in Asian trade on Monday after data showed the US economy growing more than first thought in April-June, with investors expecting it to break the 110 yen threshold “sooner or later.”
The greenback bought 109.44 yen in Tokyo on Monday, up from 109.28 yen in New York.
The single European currency was trading at $1.2676, down from $1.2683 in US trade on Friday, and at 138.75 yen against 138.60 yen.
Traders moved into the dollar after the Commerce Department said the US economy grew 4.6 percent in the second quarter, better than the previous 4.2 percent estimate.
The figure represents a strong rebound from the first quarter’s 2.1 percent contraction, which was blamed in part on unusually severe winter weather that hit the country
With strong appetite for the dollar among investors, the greenback may break 110 yen before the release of US jobs data on Friday, Nomura Securities chief FX strategist Yunosuke Ikeda said in a morning note.
If the jobs data is positive, the pair may go up even higher, dealers said.
“The dollar remains bullish and looks certain to hit 110 yen sooner or later,” Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management, told Dow Jones Newswires.
“If the headline jobs data comes in stronger than expected and Treasury rates rise, an overshoot of 110 yen is entirely possible.”
Japanese stocks are expected to benefit from a lower yen, a positive for exporters as it makes their products cheaper in overseas markets.
Investors were also closely monitoring the $1.2 trillion Government Pension Investment Fund, which is expected to boost its equities allocation.
That move would likely signal a follow-through from other pension funds and drive up demand on the Tokyo Stock Exchange, pushing prices up accordingly.
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