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The dollar was under pressure against the yen in Asian trade Monday as investors closely watched for possible steps Japanese authorities may take against the yen's strength, dealers said.
The dollar was changing hands at 85.72 yen in Tokyo morning trade, down from 86.28 yen late Friday in New York, where the greenback had slumped to the mid-84 yen level last week. The euro was almost flat at 1.2752 dollars compared with 1.2750, while it eased to 109.32 yen from 109.95.
Global recovery fears were brought into focus by Japan's weaker-than-expected gross domestic product figures. Japan on Monday reported its economy grew at the slowest pace in three quarters during April-June. Real gross domestic product increased by an annualised 0.4 percent in the quarter, sharply missing forecasts from economists polled by Dow Jones Newswires of 2.3 percent annualised growth.
Investors were watching closely for possible intervention moves by Japanese authorities, with local media reporting that Prime Minister Naoto Kan and Bank of Japan governor Masaaki Shirakawa would meet this week to discuss the recent yen strength. However, Japanese economy minister Satoshi Arai told reporters he was not aware of the meeting being scheduled.
In Tokyo shares were 0.94 percent lower on the strength of the local currency, with exporters taking a hit. "Investors are dumping exporter stocks because they still don't know how far the yen will appreciate from the current level," Yumi Nishimura, senior market analyst at Daiwa Securities Capital Markets, told Dow Jones Newswires.
