TOKYO (Dow Jones)--The euro continued to rise against the dollar and yen in Asia Thursday as the region's investors became more optimistic toward the European economy after recent data, and more risk tolerant on higher crude oil prices.
"Some players think the euro may keep rising because it looks like the European economy is stronger than they anticipated a few weeks ago," said Shinichi Hayashi, a senior dealer at Shinkin Central Bank.
The euro may strengthen by the end the week to $1.4050 and Y135.00, some dealers said. At 0450 GMT, it was at $1.3952, higher than $1.3945 in New York Wednesday, and at Y133.59, above Y133.33 yesterday.
One indicator boosting bullishness toward the euro-zone was this week's German ZEW data, which measures sentiment among European financial analysts. The headline figure came to 44.8, much better than the consensus forecast of 37.0.
The recent rise in crude oil prices is also lifting the euro by whetting investors' risk appetite, and prompting more purchases of euro-denominated risk assets, traders said. The euro's been considered a higher risk currency than its U.S. and Japanese counterparts recently, and it has benefitted when the market's risk tolerance increased.
Asian traders were also talking Thursday about the currency market effect of the planned Y923 billion share offering by Sumitomo Mitsui Financial Group Inc., Japan's third-largest bank by assets.
Some said the yen might rise against the dollar on this factor, as non-Japanese investors buy the Japanese currency to acquire the bank's new shares. Payments for the public offering are due June 22.
"A lot of currency players are talking about this today because it is believed that about half of the new shares will be bought by non-Japanese investors," said Yuji Saito, head of FX at Societe Generale.
Overnight U.S. economic data also capped the dollar's upside, dealers said. The U.S. Labor Department said Wednesday the consumer price index rose 0.1% in May from April, below economist expectations for a 0.3% increase.
"Players have been too optimistic about U.S. economic fundamentals. It is about time to correct these views," said Minoru Shioiri, a senior dealer at Mitsubishi UFJ Securities. "The U.S. economy may have bottomed out, but it's too early to say it has entered a recovering phase."
The dollar was trading around Y95.77 at 0450 GMT in Asia, higher than Y95.63 in New York.
Interbank Foreign Exchange Rates At 00:50 EDT / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates 2150 GMT High Low 12/31
USD/JPY Yen 95.73-77 95.65-70 +0.08 95.99 95.64 +5.66
EUR/USD Euro 1.3950-54 1.3942-47 +0.06 1.3973 1.3934 -0.20
GBP/USD Sterling 1.6379-83 1.6398-03 -0.12 1.6428 1.6367 +11.99
USD/CHF Swiss Franc 1.0808-12 1.0790-98 +0.17 1.0813 1.0779 +1.30
USD/CAD Canadian Dlr 1.1321-27 1.1319-24 +0.02 1.1328 1.1295 -6.94
AUD/USD Australian Dlr 0.7946-50 0.7936-40 +0.13 0.7977 0.7925 +12.34
NZD/USD New Zealand Dlr 0.6325-32 0.6335-42 -0.16 0.6350 0.6314 +8.40
EUR/JPY Yen 133.55-60 133.34-39 +0.16 134.12 1
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