The dollar lost ground against the Japanese yen, Australian dollar and euro during Asian trading Thursday, as investors tempered their optimism over the likely policy stance of President-elect Donald Trump following his first news conference since the U.S. election.
Mr. Trump spoke widely, but failed to give more details of his administration’s plans for economic stimulus, trade policy or taxes. Expectations for these plans have underpinned the dollar’s rally since the election.
The lack of clarity prompted further selling of the dollar against its major rivals following sharp falls overnight.
The yen gained 0.9% Thursday, as the dollar gave up almost all the ground regained from a one-month low of ¥114.28 set overnight. The dollar was trading at ¥114.38 at the Tokyo lunch break, compared with ¥115.38 late Wednesday in New York. The Australian dollar was up 0.3% Thursday, with gains since Mr. Trump’s news conference reaching 1.6%. The euro was changing hands at $1.0602, up 0.4% from late Wednesday.
The dollar also fell against other currencies in Asia, though the movements were less marked, as investors tried to gauge how a more cautious view of the U.S. economy might affect emerging economies. China guided the yuan 0.1% stronger against the dollar, and in offshore trading hubs like Hong Kong, the dollar rose 0.1% to 6.8910.
Mr. Trump’s comments left a list of questions unanswered, Westpac Bank analysts said in a note to investors.
“The news conference was a far cry from the market-friendly, pro-growth comments that Trump delivered at his acceptance speech on Nov. 9,” they said.
The dollar’s postelection rally is “over for now,” said Takuya Kanda, senior researcher of the Gaitame.com Research Institute, adding that he expects downside pressure on the dollar to continue ahead of Mr. Trump’s inauguration next week.
Dollar selling is more likely throughout the next week, as investors who bought the dollar ahead of Mr. Trump’s news conference learned their lesson as the currency slid in the absence of details on his economic policy, Mr. Kanda said.
But Mr. Trump’s inauguration speech will be scripted and is likely to more deliberately touch on the matters most pertinent to global currency and bond markets, economists said.
Still, market watchers in Tokyo expressed concerns about Mr. Trump’s mention of Japan in the context of trade imbalances, another factor that fed yen strength Thursday.
SMBC Nikko foreign-exchange strategist Makoto Noji said investors need to watch the potential for Mr. Trump to embark on a major offensive against Japan’s trade surplus with the U.S. A ratcheting-up of rhetoric is plausible, as the president-elect mentioned Japan among the trade partners with huge imbalances, Mr. Noji added.
“We shouldn’t underestimate Trump’s mention of Japan” alongside China and Mexico, he said.
The WSJ Dollar Index, a measure of the U.S. dollar against a basket of major currencies, was down 0.23% at 92.20.
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