Dollar steady in light trade, yen little changed after
Japan economic data
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[December 26, 2017]
By Lisa Twaronite
TOKYO (Reuters) - The dollar held steady in
Tuesday's holiday-thinned trade, shrugging off upbeat Japanese economic
data as market participants pondered about next year's potential
catalysts.
Markets in Australia and Hong Kong remained closed after Monday's
Christmas holiday, and many financial centers in Europe will also be
shut on Tuesday.
The euro inched down 0.1 percent to $1.1869 <EUR=>. The single currency
gave up some ground last week after Catalan separatists won a regional
election, deepening Spain's political crisis in a sharp rebuke to Prime
Minister Mariano Rajoy and European Union leaders who backed him.
Against the yen, the dollar was almost flat on the day at 113.30 <JPY=>.
"Yesterday and today, major markets are closed, so it's difficult to see
clear direction at the moment, and we need to think about what will
happen in the beginning of next year," said Masafumi Yamamoto, chief
currency strategist for Mizuho Securities in Tokyo.
"I still believe that the passage of the U.S. tax bill and the avoidance
of the government shutdown are positive for the dollar," he said. "In a
relative sense, the dollar has an advantage."
Last week, the U.S. Congress approved a tax code overhaul that was
expected to give at least a short-term lift to already solid economic
growth. They also pushed through a measure to fund the federal
government through Jan. 19, averting agency shutdowns.
The market had a muted reaction to data released early on Tuesday which
showed that Japan's core consumer prices rose for the 11th straight
month, up 0.9 percent year-on-year, and household spending jumped in
November.
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The employee of a currency exchange shop counts U.S. dollar
banknotes, in Ciudad Juarez, Mexico November 10, 2017. REUTERS/Jose
Luis Gonzalez
While the inflation rate remains distant from the Bank of Japan's 2 percent
target, the rise offered some hope that a steady economic recovery will
gradually drive up prices.
"The inflation numbers were pretty good," said Bart Wakabayashi, branch manager
for State Street Bank in Tokyo.
"The only big factor still left is wages, and then you'll have the perfect
storm" for prices to move higher, he said.
On Tuesday, Japanese Prime Minister Shinzo Abe urged companies to raise wages by
3 percent or more next year, keeping up pressure on firms to spend their huge
cash pile on wages to broaden the benefits of his "Abenomics" stimulus policies.
Minutes of the BOJ's October meeting, released on Tuesday, showed most members
shared the view that the central bank should maintain its easy policy.
The BOJ kept monetary policy steady last week and its governor reassured markets
the central bank will lag well behind overseas peers in ending its ultra-easy
policies.
The dollar index, which tracks the greenback against a basket of six major
rivals, edged down slightly to 93.278 <.DXY>.
Bitcoin extended its gains, and was last up 10.5 percent at $15,375.83 <BTC=BTSP>
on the Luxembourg-based Bitstamp exchange.
The volatile cryptocurrency fell nearly 30 percent at one stage on Friday.
(Reporting by Lisa Twaronite; Editing by Shri Navaratnam)
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