By James Ramage
The dollar gained against the yen Monday as calmer markets
reduced demand for the haven Japanese currency and as traders
prepared for the arrival of the last significant U.S. economic
numbers for the year.
The dollar rose 0.4% to 120.03 yen, the highest in two weeks, in
light trade.
The yen's modest loss reflects an easing of tension in financial
markets as the holidays approach. For much of December, the yen had
strengthened against the dollar as plummeting oil prices pounded
commodity-based economies and emerging-market assets, particularly
the Russian ruble, sending investors into assets perceived to keep
their values in uncertain times.
"For [the dollar-yen pair], we saw a bit of a pullback earlier
this month," said Chris Gaffney, senior market strategist at
EverBank Wealth Management. "But people have seen good price levels
and maybe wanted to get back in before the end of the year."
The bulk of the week's U.S. economic data arrives Tuesday,
including U.S. durable goods orders, the final revision to gross
domestic product in the third quarter and the University of
Michigan's consumer sentiment index and personal spending and
income data. Most numbers are expected to rise from their most
recent figures.
But with fewer market participants and lighter trading volumes
expected this holiday week, the dollar is largely expected to trade
in tight ranges to the yen and the euro, said Carl Forcheski,
director of corporate currency sales at Societe Generale.
"The dollar rally won't reassert itself until next year," he
said. "And it should be subdued then, because people have been
pricing in the Fed's move. The Fed is preparing the markets for a
June liftoff."
In other trade, the euro traded flat against the dollar at
$1.2226, rising slightly from a new 28-month low of $1.2216 reached
earlier in the Americas session.
Write to James Ramage at james.ramage@wsj.com