By Kristine Aquino and Monami Yui - 2012-06-01T01:41:57Z
The dollar rose versus all but one of its 16 major counterparts as investors sought the relative safety of the U.S. currency amid concern China’s economy is slowing and Europe’s debt crisis is deepening.
The dollar climbed against the euro and yen after a report showed China’s manufacturing Purchasing Managers’ Index expanded less than forecast last month. The greenback’s appeal was also boosted after leaders of Italy and the European Central Bank clashed with Germany by demanding bolder steps to stabilize the economies of the 17-nation currency bloc. The yen weakened after Japanese Finance Minister Jun Azumi pledged to take “decisive” action if excessive currency gains persist.
“The U.S. dollar is the gainer for now because of risk aversion,” said Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore. “There will be more downside risk for today” for market sentiment, he said.
The dollar strengthened 0.3 percent to 78.58 yen as of 10:39 a.m. in Tokyo. The U.S. currency added 0.2 percent to $1.2335 per euro and touched $1.2324, the highest since July 2010. The yen fetched 96.92 per euro from 96.84.
A Chinese manufacturing gauge fell to 50.4 last month from 53.3 in April, the statistics bureau and logistics federation said in a statement today in Beijing. It’s the weakest reading since December and compares with the 52.0 median forecast in a Bloomberg News survey. A reading above 50 indicates expansion.
The yen declined as Azumi’s comments fueled speculation officials are preparing to intervene in currency markets.
“We will continue to carefully monitor currency market moves with more caution,” Azumi told reporters in Tokyo today. “If these excessive moves continue, I think I must take decisive action” on the yen, he said.
The last time Japan intervened in the currency market to stem the yen’s appreciation was on Nov. 4. Japanese officials sold at least 14.3 trillion yen ($181.9 billion) last year to stem currency strength that is forcing exporters to cut labor costs as they lose customers to their overseas rivals.
To contact the reporters on this story: Kristine Aquino in Singapore at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; Monami Yui in Tokyo at This e-mail address is being protected from spambots. You need JavaScript enabled to view it
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Tomohiro Ohsumi/Bloomberg
A dealer works on the trading floor of a foreign exchange brokerage in Tokyo. The yen fetched 96.91 per euro as of 8:37 a.m. in Tokyo from 96.84 yesterday, when it touched 96.51, the strongest level since Dec. 1, 2000.
A dealer works on the trading floor of a foreign exchange brokerage in Tokyo. The yen fetched 96.91 per euro as of 8:37 a.m. in Tokyo from 96.84 yesterday, when it touched 96.51, the strongest level since Dec. 1, 2000. Photographer: Tomohiro Ohsumi/Bloomberg
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