GLOBAL MARKETS-Yen edges up from lows, Asian shares rise

Mon May 20, 2013 12:19am EDT

* Dollar slips from Friday's 4-1/2 year high vs yen

* Asian shares firmer after Friday's Wall Street rally

* MSCI Asia Pacific ex-Japan rises 1.1 percent

By Masayuki Kitano

SINGAPORE, May 20 (Reuters) - The yen edged higher on Monday after Japan's economics minister said further weakness in the yen could harm households, while Asian shares rose in response to U.S. equities rallying on upbeat economic data.

The dollar fell to as low as 102.00 yen earlier on Monday, pulling away from Friday's high of 103.32 yen, the greenback's highest level versus the yen since October 2008.

The dollar later pared some of its losses, and last stood at 102.69 yen, down 0.5 percent on the day.

Comments by Japanese Economics Minister Akira Amari over the weekend spurred buy backs of the yen, market players said.

"People say the excessively strong yen has corrected quite a bit. If the yen continues to weaken steadily from here, negative effects on people's lives will emerge," Economics Minister Akira Amari told a Sunday talk show.

The dollar, which gained last week on speculation that the U.S. Federal Reserve could soon begin to rein in its bond-buying programme, remained within sight of a near three-year high set on Friday versus a basket of currencies.

"It was on the back of those Amari comments ... especially after the big rally in dollar/yen on Friday. But thin liquidity is exacerbating the moves," said Sue Trinh, senior currency strategist at RBC in Hong Kong, referring to the dollar's earlier drop against the yen.

Asian stock markets rose broadly, boosted by U.S. equities hitting record closing highs on Friday as encouraging economic data prompted investors to buy into growth companies.

In the stock market, MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.1 percent, with Australian shares rising about 1 percent.

Thai equities rose 0.6 percent, staying firm even after data showed Thailand's economy shrank 2.2 percent in the first three months of 2013 from the previous quarter.

Japan's Nikkei share average touched its highest intraday level since December 2007, and was last up 1.6 percent.

"Strength in the U.S. market and signs of a recovery in the U.S. economy are serving as a tailwind to the Nikkei's further gains. It's promising that the yen is staying below 100 yen to the dollar," said Yutaka Miura, a senior technical analyst at Mizuho Securities in Tokyo.

The dollar index, which measures the dollar's value against a basket of currencies, stood at 84.112. On Friday, the dollar index had risen to 84.371, its strongest level since July 2010.

The dollar has been buoyed by speculation that the Fed might taper its $85 billion in monthly bond purchases later this year.

Such chatter had increased after John Williams, president of the Federal Reserve Bank of San Francisco, said on Thursday the Fed could begin easing back on the monetary gas pedal this summer and end bond buying late this year.

Gold tumbled 1.5 percent to a one-month low of $1,338.95 earlier on Monday, pressured by expectations the Fed could soon halt its asset buying programme. Gold last fetched $1,344.51.

Brent crude edged up 0.1 percent to $104.70 a barrel.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.