Source AP ©

Dollar higher against yen in Asia on weaker Japanese industrial data

The dollar advanced against the yen in Asia Thursday on speculative buying after Japanese industrial production data came out weaker than expected.

The U.S. dollar was trading at 123.06 yen midafternoon, up from 122.43 yen late Wednesday in New York. The euro rose to US$1.3462 from US$1.3445.

The government earlier Thursday said Japanese industrial output fell 0.4 percent in May from April, the third straight monthly decline and prompting some players to buy the U.S. currency. Economists had projected a 0.8 percent increase.

Traders say that while the sluggishness of the U.S. housing sector is worrying, expectations that U.S. interest rates will stay high compared to Japanese ones should support the dollar.

Market participants said they would be paying close attention to remarks by the Federal Reserve members Thursday on their outlook for U.S. inflation and real estate for clues on future monetary policy.

But "I don't think that the Fed will change its stance, and may just say the U.S. economy is gradually expanding with moderate inflation growth, as it has," said Masashi Kurabe, senior manager at Bank of Tokyo-Mitsubishi UFJ's foreign-exchange trading department.

Regardless of the U.S.'s economic condition, "the yen won't rise continuously against the dollar" unless the Bank of Japan conducts a series of rate hikes, said Masanobu Ishikawa, senior manager at Tokyo Forex and Ueda Harlow.

Against other regional currencies, the dollar was mixed, rising to 32.816 Taiwan dollars from 32.314 the previous day but falling 46.250 Philippine pesos from 46.550.

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