Dollar up against the yen – Post (subscription)

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Tokyo – The dollar’s surge against the Indian rupee took a breather on Friday after hitting record highs for most of the week, although upbeat manufacturing data from around the world helped the greenback higher against the yen.

However, traders remain on edge – particularly in emerging markets – about the future of the US Federal Reserve’s stimulus programme after minutes from the bank’s July meeting failed to clarify the situation.

The Indian rupee, which tumbled to another record low of 65.56 to the dollar on Thursday, was changing hands at 64.41 in early trade Thursday.

India’s finance minister and central bank governor both tried to calm investors on Thursday by reiterating that new Delhi does not plan to introduce capital controls, a fear that had weighed on the unit earlier this week.

The Thai baht firmed to 31.96 to the dollar against 32.12 but the Indonesian rupiah fell further to around four-year lows of 11,120, from 10,958.

Expectations of an end to the stimulus have seen foreigners in recent months repatriate some of the vast sums that have poured into emerging economies, in turn hitting currencies and equities.

National Australia Bank said in a note early Friday that while there was still pressure on units such as the rupee and rupiah “there has not been the severe stress in emerging markets that we saw mid-week”.

It added: “Better data out of Europe and to some extent the US has also helped support developed world equity markets.”

The dollar climbed to 99.05 yen in Tokyo from 98.68 yen in New York Thursday afternoon while the euro bought $1.3352 and 132.27 yen compared with $1.3354 and 131.80 yen.

Sentiment was boosted by a slew of manufacturing data that point to a pick-up in the global economy.

On Thursday, a preliminary purchasing managers index (PMI) of manufacturing activity in the eurozone hit a 26-month high, while a reading in the United States also showed improvement. Earlier in the day HSBC said its PMI for China had also shown growth for the first time in four months.

Wall Street also provided a positive lead. The Dow rose 0.44 percent, the S&P 500 added 0.86 percent and the the Nasdaq jumped 1.08 percent. The rises came despite an unexplained glitch that shut down trading on the Nasdaq for about three hours, which interrupted business on other markets.

The Nikkei 225 index on the Tokyo stock exchange closed the morning up more than two percent. – Sapa-AFP