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Dollar dips on NYSE failure to react to allied victory in Iraq.

TOKYO, April 10 Kyodo

The U.S. dollar inched down against the yen Thursday in Tokyo on traders' disappointment at the U.S. equities market's overnight failure to score any gains despite the collapse of Iraqi President Saddam Hussein's regime in Baghdad.

At 5 p.m., the dollar was quoted at 119.79-83 yen, down from Wednesday's 5 p.m. quotes of 120.00-10 yen in New York and 119.75-78 yen in Tokyo.

At 9 a.m., the dollar fetched 120.16-19 yen and followed a generally downward path with traders disappointed at the response of the New York Stock Exchange to the news that Saddam's rule has collapsed in chaos in Baghdad.

Junya Tanase, global market officer at JP Morgan Chase Bank, said, ''The dollar was sold in Tokyo, because U.S. equities prices did not respond to the news of the collapse of the Iraqi regime.''

The Dow Jones Industrial Average gave up 100.98 points to close at 8,197.94 on Wednesday, brushing aside the news of the coalition's victory.

During the day, the currency moved between 119.70 yen and 120.30 yen, trading most frequently at 120.10 yen.

At 5 p.m., the euro was quoted at $1.0775-0779 and 129.10-14 yen, compared with Wednesday's 5 p.m. quotes of $1.0765-0775 and 129.25-35 yen in New York.

The dollar's slide was fueled by sales by exporters that perceived the yen-dollar rate to be at lucrative levels at which to sell the dollar, currency traders said.

Traders said both the currency and equities markets appear to be shifting their focus to the U.S. economic fundamentals, now that the allies' victory in the Iraq war has been factored into these markets.

''Since major U.S. corporations are set to release their financial results next week, the currency market will determine how to respond by closely examining how the U.S. stock market will react to those corporate earnings reports,'' Tanase said.

Should the news of Saddam being captured or killed sweep the market, it would trigger dollar purchases, albeit not sharply, he said.

A currency trader at another foreign bank said, ''Since the economic fundamentals at all of the United States, Germany and Japan are deteriorating, we have found it hard to concentrate selling on the dollar alone.''
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Publication:Japan Weekly Monitor
Date:Apr 14, 2003
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