Dollar stable in thin Asian trade

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TOKYO: The dollar was stable against the yen in thin trade in Asia on Monday, following a volatile week when the greenback had neared a post-war low against the Japanese unit.

The dollar recovered slightly to 76.83 yen in afternoon trade, compared with 76.76 yen late Friday in New York.

The euro firmed to $1.4295 from $1.4250, and to 109.86 yen from 109.30 yen.

The Japanese currency, seen as a safe-haven unit amid market turmoil, last week neared its post-World War II high of 76.25 to the dollar.

Investors were watching Monday whether Japanese authorities would again step into markets after they sold yen earlier this month on fears that its strength is hurting Japan's exporters, a driving force of the economy.

"Market players are bracing for the dollar to fall further to the mid-76 yen range while closely watching for the risk of intervention," said Nobuyoshi Kuroiwa, senior deputy general manager of Hachijuni Bank's forex team.

"The greenback may get dragged down in afternoon trade," he said. "But for now it seems stable at the upper 76-yen level because of fears of another intervention."

Japan's Cabinet Office reported Monday that the country's economy shrank an annualised 1.3 percent in the April-June quarter -- a better-than-expected figure following the March 11 quake and tsunami disaster.

Post-disaster falls in consumer spending and in April exports were the main causes of the third straight quarterly contraction, analysts said.

The figure beat market expectations of a 2.7-percent contraction, but Kuroiwa said the currency trade, thin during the summer vacation period, did not react to the growth data.

The Swiss franc, a safe-haven currency that surged last week, eased against major currencies in the afternoon, with the euro rising to 1.1291 francs from 1.1083 Friday and the dollar higher at 0.7975 francs from 0.7777.

The Swiss National Bank had said on Thursday that it was keeping all options open to bring down the "massively" overvalued franc, including pegging it to the euro as well as imposing a negative interest rate.

The dollar was lower against other major Asian currencies, easing to Sg$1.2072 from Sg$1.2138 on Friday, to 1,073.28 South Korean won from 1,082.53 and to Tw$28.95 from Tw$28.97.

The unit also fell to 8,541.75 Indonesian rupiah from 8,556.75, to 42.49 Philippine pesos from 42.62 and to 29.89 Thai baht from 29.95. (AFP