* Dollar/yen hits 2-week high, euro/dollar near 3-1/2-week
* Relief as currencies were not high on U.S.-Japan summit
* Dollar resumes rise on tax reform hopes
* Kiwi edges back after being hit by RBNZ last week, Aussie
(Updates prices, adds details and quotes)
By Shinichi Saoshiro
TOKYO, Feb 13 The dollar rose to a two-week high
versus the yen on Monday, with the market breathing a sigh of
relief as the closely watched two-day U.S.-Japan summit held
over the weekend was seen to have ended smoothly.
U.S. President Donald Trump and Japanese Prime Minister
Shinzo Abe appeared to have established a quick friendship
through a hug, a prolonged handshake and rounds of golf,
allaying investor fears of the meeting ending acrimoniously with
Trump talking tough on trade, currency and security issues.
The dollar index against a basket of major currencies was up
0.15 percent at 100.930, close to a near two-week high of
101.010 reached on Friday when pledges of "phenomenal" tax
reforms by Trump had boosted the greenback.
The dollar was up 0.65 percent at 113.920 yen,
briefly touching 114.170, the highest since Jan. 30.
"There is relief that the summit ended without
confrontation, and that the joint statement did not directly
touch upon currency issues," said Masafumi Yamamoto, chief forex
strategist at Mizuho Securities.
There was concern prior to the summit that Trump would
reiterate accusations that Japan was one of several countries
devaluing their currencies to the disadvantage of the United
"While the outcome of the U.S.-Japan summit itself is not a
huge dollar boosting factor, the currency continues to receive
firm support from expectations towards Trump's 'phenomenal' tax
plans," Yamamoto said.
Trump said his administration would be announcing "something
phenomenal in terms of tax" over "the next two or three weeks"
during a meeting with airline executives on Thursday.
The president's comments increased risk appetite, sending
Wall Street shares to record highs on Friday, in turn lifting
U.S. Treasury yields from multi-week lows to the dollar's
The market's near-term focus was on Federal Reserve Chair
Janet Yellen's congressional testimony scheduled for Tuesday and
Wednesday. Investors are keen to gauge Yellen's policy stance
after the central bank upgraded its inflation views earlier this
"Trump has just taken a positive approach to tax reforms and
infrastructure spending. It remains to be seen if this has any
impact on Yellen, as the Trump administration's lack of policy
clarity seemed like a factor that made the Fed hesitant to raise
rates," said Koji Fukaya, president at FPG Securities.
U.S. indicators being awaited for their potential market
impact included the January producer price index (PPI) on
Tuesday, the January consumer price index (CPI) and retail sales
on Wednesday and housing-related data on Thursday.
The euro was down 0.2 percent at $1.0621, dipping
close to Friday's 3-1/2-week low of $1.0608.
The common currency fell 1.3 percent last week, its biggest
weekly loss in three months, as political risks rose on the back
of election concerns in countries such as France and Germany.
Resurfacing Greek debt woes further hurt confidence towards the
Elsewhere, the New Zealand dollar inched up 0.1 percent to
$0.7203. It continued to edge away from a 2-1/2-week
low of $0.7172 struck Thursday after the Reserve Bank of New
Zealand (RBNZ) signalled that it would keep interest rates at
record lows for two years.
"The RBNZ has clearly knocked the New Zealand dollar lower.
However, we still find it difficult to get overly bearish given
a still solid economic picture," wrote Philip Borkin, senior
economist at ANZ.
The Australian dollar was little changed at $0.7671
after surging 0.7 percent on Friday on upbeat Chinese trade data
and an optimistic economic view given by the Reserve Bank of
Australia. A rise above $0.7696 would take the Aussie to a
(Editing by Richard Pullin and Jacqueline Wong)