August 26, 2009
TOKYO (AFP) - The safe-haven yen gained in Asian trade on Wednesday as traders remained nervous about the outlook for the Chinese and US economies despite recent signs of improvement, dealers said.
The dollar eased to 93.97 yen in Tokyo morning trade, down from 94.15 in New York late Tuesday. The euro edged up to 1.4298 dollars from 1.4294 but dropped to 134.36 yen from 134.62.
"The focus is still on Shanghai shares," said Akira Takeuchi, a dealer at Chuo Mitsui Trust Bank. "The outlook for the Chinese market is uncertain."
The Shanghai stock market has endured a rollercoaster ride in recent weeks as investors fret over whether a bubble in the market is deflating.
China's economy has held up better than many others due to a massive stimulus package, but Prime Minister Wen Jiabao warned this week that the situation was "still very grave".
Japanese markets are also paying close attention to a general election on August 30 with opinion polls suggesting that the opposition Democratic Party of Japan is likely to wrest power from Prime Minister Taro Aso's ruling coalition.
"A change of power has largely been taken into account but it is still uncertain how it would affect the Japanese economy," Takeuchi said. "First, market participants want to see election results."
The market largely ignored government data showing another improvement in Japan's trade surplus in July.
The euro, which tends to do better than the safe-haven dollar during times of increased economic optimism, was well bid after signs of an improvement in US consumer confidence and home prices.
The US Conference Board reported its consumer confidence index rebounded to 54.1 points in August, well above analyst forecasts and snapping two months of decline.
The S&P/Case-Shiller housing price index showed declines in 20 cities slowed to an annual decline of 15.4 percent in June from 17.1 percent in May.
