The dollar rose in Asia Tuesday as gains in Tokyo stocks boosted sentiment, but lower US bond yields kept the unit under the 102-yen level, analysts said.
In Tokyo late morning trade, the greenback climbed to 101.50 yen, up from 101.31 yen in New York Monday afternoon.
The euro was changing hands at $1.3691 against $1.3694 while it rose to 138.93 yen from 138.73 yen.
The dollar´s rise came as Tokyo´s benchmark Nikkei stock index gained more than one percent in morning trade.
Investors were cheered by upbeat capital spending plans by Japanese companies seen in the Bank of Japan´s quarterly Tankan survey — although overall sentiment sagged from a more than six-year high in the first quarter as an April sales tax hike weighed on activity.
On Monday, the dollar fell as a fuller-than- anticipated surge in US pending home sales in May was offset by a lag in economic activity in the Chicago region, putting an end to two months of profits.
Daisuke Karakama, market economist at Mizuho Bank, said lower US bond yields held back the dollar´s gains Tuesday. “The dollar may have marched up this morning, only it´s not bullish,” he stated.
“The basic tendency is that the recent poor US (economic) data led to bond buying, lowering yields.”
Investors are closely monitoring US manufacturing data for June due out after Tuesday, Junichi Ishikawa, market analyst at IG Securities, told Dow Jones Newswires.
If the index shows improvement in economic fundamentals, the buck is likely to make, although a weak report could help pull it below 101 yen, he stated.
The euro was mixed as new data showed euro zone inflation was 0.5 percent in June — the same stratum as in May.
That set the lowest inflation level since the financial crisis of 2008-2009 nearly froze the market on which banks lend to each other and caused a recession in several advanced economies.