The dollar rose against the yen in Asia Monday on buying by Japanese importers, but players said the dollar may drop later amid pessimism over the U.S. economy.The dollar rose to 108.90 yen midafternoon in Tokyo, up from 108.45 yen from late Friday in New York. In late December, it was trading above 114 yen. The euro, meanwhile, fell to US$1.4726 from US$1.4773.

Currency players are paying attention to falling stock prices, especially in Japan, London and New York, said Societe Generale’s senior dealer Yuji Saito, as the moves may give players a hint as to how much the dollar may decline against the yen. Japan’s Nikkei 225 index was down 1.2 percent in late afternoon trading Monday, and the Dow Jones industrial average fell 1 percent Friday.

“The dollar dropped enough last week, so in order for it to slip further, players need new trading factors, such as another sharp drop in stock prices,” Saito said.

Many Tokyo dealers hold a similar view, saying without new negative U.S. economic news, the dollar may get stuck in a tight trading range against the yen as Japanese economic fundamentals are discouraging players to actively buy the currency.

source : http://www.thejakartapost.com