TOKYO: The dollar edged down against the yen in Asian trade on Wednesday with the market closely watching Chinese share prices following their recent volatility, dealers said.
The dollar fell to 94.65 yen in Tokyo morning trade from 94.70 in New York late Tuesday. The euro gained to 1.4136 dollars from 1.4132 but slipped to 133.65 yen against 133.85.
“The foreign exchange market is being influenced by global share prices, particularly the Shanghai market,” said Yosuke Hosokawa, head of forex at Chuo Mitsui Trust Bank. “Prospects for the global economy are still uncertain.”
He said the safe-haven yen might gain further if shares suffer another fall, triggering selling of risky assets.
Chinese shares fell slightly in morning trade Wednesday as sentiment remained fragile after recent market losses.
Traders were mulling a mixed batch of data. US home construction activity saw a surprise decline in July, with both new starts and building permits falling, the Commerce Department said Tuesday.
But in Germany, the closely watched ZEW index of investment sentiment rose 16.6 points to 56.1 points, well ahead of analyst forecasts.
“It’s almost certain that the global economy is through the worst phase,” Hosokawa said. “Now we are at the next stage, where we will see a zigzag trend for the time being before reaching a full recovery.”
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