Bloomberg: Dollar May Rise Versus Yen on Extra Yield Investors Can Get on U.S. Assets

Dec. 16 (Bloomberg) — The dollar may advance against the yen
and the euro in Asia on speculation investors will return their
focus to the yield premium they can earn on U.S. assets.

Higher U.S. rates than in Japan and Europe have helped the
dollar rally more than 13

percent against the yen and the euro
this year. The dollar pared a decline yesterday against the yen
after the U.S. Treasury said international investors bought a net
$106.8 billion of bonds and stocks.

“The prospect of a widening interest rate gap between the
U.S. and other major economies such as Japan still supports the
dollar,” said Michiyoshi Kato, vice president of foreign-exchange
sales in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan’s
second-largest lender by assets. “What we have seen in the past
few days is just unwinding of some bets on a yen decline.”

Against the yen, the dollar traded at 116.38 at 8:20 a.m. in
Tokyo, from 116.23 late yesterday in New York, according to
electronic foreign-exchange dealing system EBS. The yen yesterday
rose as high as 115.83, a level unseen since Oct. 31. Against the
euro, the dollar was at $1.1966 from $1.1979.

The dollar will move between 115.60 yen and 116.80 yen, and
$1.1930 and $1.2030 versus the euro today, Kato said.

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