The yen strengthened against the dollar and the euro in otherwise thin Asian trade Thursday, tracking a decline in the Nikkei Stock Average in the early afternoon. The dollar USDJPY, -0.23% was at ¥117.35 from ¥117.72 late Wednesday in New York. The euro EURJPY, -0.43% was at ¥146.74 from ¥147.24. The greenback had been trading in a tight range in the upper half of ¥117 for the most of the day, with a smaller number of market participants amid thin trade on the U.S. Thanksgiving holiday. But a fall of about 1% in the stock market at the beginning of the afternoon session helped nudge down the U.S. currency to as low as ¥117.27--the lowest since Nov. 19. "The dollar saw some slight turbulence in keeping with the Nikkei decline in the early afternoon," said a senior dealer at a Japanese bank. There were no other fresh incentives to move the market and the decline was likely exaggerated by some big orders on a day of thin market volume. The benchmark Nikkei index NIK, -0.78% closed down 0.8%. Still, the U.S. currency managed to stay above ¥117, underscoring how investors including Japanese importers are still willing to buy the dollar on dips. Many investors were unable to catch up with the speed of the dollar rally in recent weeks, making them unable to build up their dollar long and yen short positions, said Junichi Ishikawa, market analyst at IG Securities. "If these positions had been sufficiently built up, it wouldn't have been a surprise to see the dollar falling at a faster pace on profit-taking," said Mr. Ishikawa. The tardiness in building positions is allowing a wider range of investors to buy the greenback on dips, he said. Still, the dollar's overall uptrend against the yen remains unchanged, said Osamu Takashima, chief FX strategist at Citigroup Global Markets Japan, in a morning note. Mr. Takashima said he still "feels the strength of the uptrend," of the dollar against the yen given the fact that position adjustments are being made in an extremely tight trading range. The dollar has moved between ¥117.27 and ¥118.98 over the past week. "After position adjustment, short-term players are again regaining room for yen selling. That's a hardheaded analysis of what is going on," said Mr. Takashima. In other currency trading, the euro EURUSD, -0.19% was at $1.2505 from $1.2509 in New York. Market participants will pay attention to a speech by European Central Bank chief Mario Draghi later Thursday, especially after ECB vice president Vitor Constancio said that the central bank is ready to buy sovereign bonds in early 2015. Source: MarketWatch
