Dollar edges down in Asia trade

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TOKYO: The dollar edged down in Asia on Thursday as Japanese exporters bought up the yen and following data showing the US economy shrunk at a faster rate than initially thought in the first quarter of the year.

The greenback was changing hands at 101.76 yen in Tokyo midday trade, marginally down from 101.86 yen in New York Wednesday afternoon.

“For technical reasons, the dollar fell because of yen-buying by exporters, but this is not strong enough to break the current range,” said Yosuke Hosokawa, head of FX sales team at Sumitomo Mitsui Trust Bank.

“Trading is still directionless as we have not seen clear trading factors for a long time,” Hosokawa said.

“We have seen geopolitical factors such as violence and issues in Iraq or Russia, but they matter more to the euro than the yen,” Hosokawa said.

The euro changed hands at $1.3630 and 138.69 yen, compared with $1.3628 and 138.82 yen in New York late Wednesday.

In New York the dollar had slipped after a larger-than-expected first quarter contraction in the US economy, with investors taking the report as dovish for interest rates.

US Treasury yields also sank on the news that the economy contracted 2.9 percent in January-March, far greater than the 1.0 percent previously estimated and the sharpest fall since the 2008-2009 recession.

That put a damper on recent speculation that growth is stronger than the Federal Reserve lets on and could drive it to an early increase in interest rates.

Investors are not awaiting US consumer spending data for May, which will be released later in the day. Atsushi Hirano, head of FX sales Japan at RBS, told Dow Jones Newswires that the dollar may strengthen slightly later in the day if the Nikkei index gains, but the pair will likely hover around 101.85 “without much buying or selling”

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