Dollar edges up in lower 122 yen range in Tokyo deals

The U.S. dollar edged up in the lower 122 yen level Friday in Tokyo as market players became confident in investing in higher yielding currencies by selling the yen after the Dow Jones Industrial Average of U.S. blue-chip stocks closed at an all-time high Thursday.

At 5 p.m., the dollar was quoted at 122.38-40 yen, compared with Thursday's 5 p.m. quotes of 121.96-122.06 yen in New York and 121.85-88 yen in Tokyo. It moved between 122.05 yen and 122.44 yen during the day, trading most frequently at 122.22 yen.

The euro maintained its strength against the dollar and the yen, in sight of its record highs of $1.3834 hit Wednesday and 168.96 on July 13, both in Tokyo. At 5 p.m., it was quoted at $1.3794-3796 and 168.82-86 yen, against Thursday's 5 p.m. quotes of $1.3798-3808 and 168.38-48 yen in New York and $1.3798-3801 and 168.16-20 yen in Tokyo.

The dollar rose moderately in the lower 122 yen level in the late afternoon as European investors joined the market.

Dealers said a record-high close Thursday for the Dow Jones index as well as firmness in Friday's Tokyo stocks gave the dollar an upward push as market players took them as a sign they can still take risks to invest in higher yielding assets, dealers said.

On Thursday, the Dow closed at a record high of 14,000.41 aided by brisk corporate earnings.

''With little fresh market-moving data and events out today, investors are focusing on basic factors such as the dollar's interest rate advantage against the low-yielding yen,'' said Akihiro Tanaka, senior currency trader at Resona Bank. ''The highlight is likely to be establishments of foreign currency-denominated investment trust products.''

But concerns over the U.S. economic outlook stemming largely from the lackluster U.S. housing loan market were keeping the dollar's upside heavy, dealers said.

''The trend in the forex market has been dollar-selling since it last hit the 124 yen level'' in late June partly due to U.S. housing woes, said Osamu Takashima, chief currency analyst at the Bank of Tokyo-Mitsubishi UFJ.

In congressional testimony Thursday, U.S. Federal Reserve Board Chairman Ben Bernanke said losses on subprime loans could amount to up to $100 million and threaten consumer spending. The comment was keeping investors uncertain about the housing market outlook, dealers said.

The dealers added that market players are now focusing on U.S. and Japanese economic readings due out next week for further hints on the economic outlook.

Upcoming data include Wednesday's U.S. existing home sales and Thursday's U.S. new home sales, both for June, and Friday's Japanese consumer price index for June.