Dollar gains on yen in early Asia with US VP Pence in Tokyo
The dollar gained slightly against the yen in early Asia on Tuesday as markets looked ahead to comments by U.S. Vice President Mike Pence in Tokyo on continued tension on the Korean peninsula.
USD/JPY rose 0.06% to 108.97, while AUD/USD traded at 0.7589, down 0.03%.
The Reserve Bank of Australia releases minutes from its April review at which it held steady at a record low 1.5% for the cash rate. Separately, China reports house prices for March.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted down 0.29% to 100.20.
Pence is expected to discuss Korean tensions with Japanese Prime Minister Shinzo Abe on Tuesday when he travels to Tokyo for economic talks with Finance Minister Taro Aso. He will also visit Jakarta and Sydney later in the week.
Overnight, the dollar fell sharply against a basket of major currencies on Monday, as investors fled the greenback amid rising tensions over North Korea.
Despite China’s efforts to dissuade North Korea from carrying out continued missiles tests, the Kim Jong-Un led nation attempted to fire a ballistic missile on Sunday but it blew up almost immediately.
Pence responded to North Korea’s failed missile attempt Monday, warning that “the era of strategic patience” with North Korea “is over”. Meanwhile, weaker than expected economic data weighed on sentiment, after New York area manufacturing slowed by more than expected in April.
The Empire State manufacturing survey fell to a reading of 5.2 April, well below consensus expectations for a reading of 15.
The rising geopolitical concerns stoked a flight to safety sentiment, as investors fled the dollar in favor of safe-haven yen.