Yen declines on the Japanese investment in foreign assets

Yen has fallen against the dollar and euro on Friday as Japanese investors continue to deploy capital in foreign assets, as well as expectations that U.S. Federal Reserve will raise interest rates sooner than previously thought.

But traders say that there is no clear trend in the market and the major currencies are likely to move within certain ranges, while the market will not see further evidence of sustainable recovery of the U.S. economy.

"The dollar will eventually rise higher against the yen and the euro, but the market is not yet fully convinced that the Fed will soon raise rates," said a senior manager of forex market "Bank of Tokyo-Mitsubishi" Kenji Kobayashi. "Thus, while
we will not over confident, trade will take place without a certain direction. "

At 03.01 GMT the dollar traded at 108.62/67 yen, rising to the level of closure of the New York session at 108.20 yen, but is below the monthly peak of 109.28 yen reached on Thursday.

Yen declines on the Japanese investment in foreign assets.
Euro strengthened to a three-week peak of 130.30 yen before declining to around 130.10 yen. It was at 129.76 yen in late U.S. session. The market had little reaction to a report release on Thursday of three Japanese hostages in Iraq, as well as the fate of two other abducted Japanese nationals remains unknown. Some analysts say that interest in the market to the situation with the hostages diminished slightly, while others said that geopolitical threats in general, continue to affect the dollar. Finance Minister Sadakazu Tanigaki said on Friday that Japan would monitor the economic impact of geopolitical risks, but added that in his opinion, the market could withstand such events.
On Thursday, while the dollar lost a little momentum in the higher than expected claims for unemployment in the U.S. last week, he found support from other indicators that point to the strengthening of the economy.

The index of the Federal Reserve Bank of Philadelphia, the status of a regional manufacturing rose in April to 32.5 from 24.2 in March, well above market forecasts to raise 26.8.

The production index of the Federal Reserve Bank of New York in April was 36.05, higher than forecasts of 30.0.

Kazunori Takada