TOKYO (AFP) – The dollar traded in a narrow range with other major currencies during slow holiday trade in Asia Friday, but analysts said the unit had more room to gain on the yen in 2015.
In Tokyo, the greenback was changing hands at 120.25 yen, edging up from 120.14 in Asia on Thursday. New York was closed Thursday for the Christmas holiday.
The euro was mixed at $1.2214 and 146.87 yen, from $1.2216 and 146.78 yen.
Trading was slow as other major markets were closed for Christmas.
Junya Tanase, JP Morgan’s chief forex strategist in Tokyo, said the dollar may rise in the coming weeks as yields on US bonds continue to outpace Japanese debt.
The yield on the benchmark 10-year Japanese government bond fell to a record low of 0.310 per cent Thursday as the Bank of Japan continues to snap up government bonds as part of its monetary easing campaign.
The dollar may “rise as it catches up with the gap (in yields) after market liquidity normalises with the return of participants from the Christmas vacation”, Tanase said.
Expectations of a mid-2015 interest rate rise by the US Federal Reserve have been boosting the dollar amid expectations that the Bank of Japan could go in the opposite direction and further expand its already huge monetary easing plan.
The dollar was mixed against other Asia-Pacific currencies. It fell to 12,394.00 Indonesian rupiah from 12,468.80 on Thursday, and to 1,099.23 South Korean won from 1,102.50 won.
The dollar firmed to Sg$1.3221 from Sg$1.3213, to 32.91 Thai baht from 32.87 baht, and to 63.62 Indian rupees from 63.52 rupees.
It traded at Tw$31.71 against Tw$31.72 while being unchanged at 44.70 Philippine pesos.
The Australian dollar bought 81.24 US cents against 81.23 cents, while the Chinese yuan was at 19.36 yen against 19.37 yen.