Reuters: US Dollar Report: FOREX-Dollar slips versus yen after Obama wins some swing states

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FOREX-Dollar slips versus yen after Obama wins some swing states Nov 7th 2012, 03:31 TOKYO | Tue Nov 6, 2012 10:31pm EST TOKYO Nov 7 (Reuters) - The dollar fell against the yen in Asia on Wednesday as traders bet U.S. President Barack Obama has a slight edge over his challenger Mitt Romney in a close-fought election. While the implications of the election outcome are far from simple, a rough consensus is that, at least in the short term, Obama's re-election is positive for bonds and could drive down the dollar against the yen, while a victory by Republican challenger Mitt Romney could lead to a rally in risk assets. Media projections that Obama won the swing states of Wisconsin and New Hampshire prompted a bit of profit-taking in the dollar/yen, as well as a fall in U.S. bond yields, which the currency pair often tracks very closely. "The market is starting to factor in Obama's re-election. The market is reacting to this with risk-off trade," said Junya Tanase, FX analyst at JPMorgan Chase. The dollar fell to as low as 79.84 yen, down 0.6 percent on the day and nearly a full yen below its four-month high hit last week. An immediate support is seen at 79.275 yen, a low hit on Oct. 30 right after the Bank of Japan's easing. The 10-year U.S. Treasuries yield dropped to 1.68 percent from 1.75 percent in late U.S. trade. "The market is showing a knee-jerk reaction as Obama seems to be inching closer to a victory," said a U.S. bank trader. Reaction in other currencies was muted, though, with many market players looking to results from more important, bigger swing states such as Ohio and Florida, which could determine the final outcome. The euro stood flat at $1.2818, off a two-month low of $1.2763 hit on Tuesday, partly on nervousness ahead of a parliamentary vote in Greece on the country's austerity reforms needed to secure international aid. The Australian dollar was little changed at $1.0427 , near five-week high of $1.0448 hit on Tuesday. Link this Share this Digg this Email Reprints

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