Dollar rises back to mid-118 yen on intervention wariness.
The dollar rose back to the middle of the 118 yen level in Tokyo on Monday following an earlier fall to 118.30 yen as the U.S. currency halted its decline on wariness of a dollar-buying intervention by Japanese authorities.
At 5 p.m., the dollar was quoted at 118.48-51 yen, compared with Friday's 5 p.m. quotes of 118.60-70 yen in New York and 117.97-118.00 yen in Tokyo.
The euro traded at $1.1680-1683 and 138.41-45 yen against $1.1690-1700 and 138.75-85 yen at 5 p.m. in New York on Friday.
In Tokyo on Monday, the dollar moved between 118.30 yen and 118.77 yen, changing hands most frequently at 118.45 yen.
In the morning, the dollar fell to the day's low of 118.30 yen on yen-buying stirred by the yen's gains against the euro, dealers said.
The U.S. currency was stuck in a narrow range around 118.40 yen in the afternoon before rising slightly to the middle of the 118 yen range in late deals.
''It's hard to sell the dollar when it is in the lower half of 118 yen because of the likelihood of the market intervention by Japanese authorities,'' said Shigehiro Kamimura, a dealer at Resona Bank.
He said market players feel that the Japanese authorities have recently become ''more aggressive'' in conducting interventions to shore up the dollar.
An intervention by the Bank of Japan is seen as a factor behind the dollar's sharp rise in New York on Friday.
Japan's Nikkei Stock Average hit a six-month high Monday, but dealers said the stock gain failed to spur any notable yen-buying as the firmness of Japanese stocks is seen as a mere reflection of gains in U.S. stocks.
Players were largely reluctant to trade actively due to a number of possible market-moving factors coming out later this week, dealers said.
''People wanted to wait and see key U.S. economic indicators, such as retail sales data and the consumer confidence index,'' said Ken Fujii, a dealer at Mitsubishi Trust and Banking Corp.
Market participants are also waiting for remarks by U.S. Treasury Secretary John Snow, who is slated to give a speech in New York on Tuesday.
Snow has repeatedly expressed opposition to any country resorting to currency market intervention as a means of stemming the dollar's slide, saying market forces should determine exchange rates.
Some dealers said the morning yen-buying by what appears to be a European bank raised speculation that a French business may seek a capital tie-up with a Japanese firm.
The speculation followed a newspaper report Sunday that Daiei Inc. and French retail giant Carrefour are in talks on a business tie-up.
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|Publication:||Japan Weekly Monitor|
|Date:||Jun 16, 2003|
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