* U.S. retail sales, consumer price data disappoints
* North Korea conducts missile test on Sunday
* Net dollar long positions at lowest since Oct-IMM data
TOKYO, May 15 The dollar started the week on the
defensive on Monday after U.S. economic data came in shy of
expectations and another missile test by North Korea at the
weekend underpinned the perceived safe-haven yen.
The dollar index, which tracks the greenback against a
basket of six major peers, was 0.1 percent lower on the day at
The dollar slipped slightly to 113.34 Japanese yen.
On Monday, North Korea said it had successfully tested a
newly developed mid-to-long range missile on Sunday, supervised
by leader Kim Jong Un and aimed at verifying its ability to
carry a "large scale heavy nuclear warhead," according to the
North's official KCNA news agency.
The North fired a ballistic missile that landed in the sea
near Russia on Sunday in a launch that Washington called a
message to South Korea, days after its new president took office
pledging to engage Pyongyang in dialogue.
U.S. data on Friday showed a smaller-than-expected 0.4
percent increase in April retail sales from March, while a
disappointing consumer prices report raised concerns for the
retail sector and the broader economy.
"The data was weaker than expected, but not weak enough to
keep the dollar under pressure for long," said Mitsuo Imaizumi,
Tokyo-based chief foreign-exchange strategist for Daiwa
"The North Korean missile news over the weekend gave the yen
some lift, but not much," he said. "Overall, we see the dollar
trading in its recent ranges for the time being, with investors
focused on next month's Federal Open Market Committee meeting."
The Federal Reserve is widely expected to raise interest
rates at that meeting and has forecast two more hikes this year
following its a quarter point increase in March.
North Korea remained a major concern for investors ahead of
the Fed meeting, said Kumiko Ishikawa, FX market analyst at Sony
Financial Holdings in Tokyo.
"If the Korean tensions escalate, we could see the dollar
break into the 112 range against the yen," and further downside
U.S. data surprises would also weigh on the U.S. currency, she
But as long as investors are still positioned for another
Fed hike, "it is difficult to sell the dollar too far for now,
and it will probably stick to a range," she added.
Net dollar long positions fell in the week ended May 9 to
their lowest since early October, according to calculations by
Reuters and U.S. Commodity Futures Trading Commission data
released on Friday.
In that week, the euro marked its first net long positioning
since early May 2014, as investors breathed a collective sigh of
relief following pro-European Emmanuel Macron's victory over
anti-EU candidate Marine Le Pen in the second round of France's
presidential election on May 7.
The euro edged down 0.1 percent to $1.0924.
The positioning data also showed speculators are net long
Australian dollars, which helped that currency move away from
last week's four-month lows.
The Aussie was up 0.2 percent at $0.7396, also
getting a lift from firmer commodities prices. Oil prices jumped
on Monday after the energy ministers of top producers Saudi
Arabia and Russia jointly said that an OPEC-led crude production
cut would be extended from the middle of this year until March
Stronger oil prices also bolstered the Canadian dollar. The
U.S dollar sagged 0.2 percent to C$1.3678, moving away
from a 14-month peak of C$1.3793 scaled earlier this month.
(Reporting by Tokyo markets team; Editing by Shri Navaratnam
and Eric Meijer)