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Dollar rises to lower 90 yen on reports over Fed chief reappointment.

TOKYO, Jan. 25 Kyodo

The U.S. dollar rose to the lower 90 yen level Monday in Tokyo on buying after reports that U.S. Federal Reserve Chairman Ben Bernanke is likely to be reappointed despite growing opposition.

At 5 p.m., the dollar 90.21-24 yen compared with Friday's 5 p.m. quotes of 89.76-86 yen in New York and 90.42-44 yen in Tokyo.

It moved between 89.82 yen and 90.35 yen, trading most frequently at 90.09 yen.

The euro was quoted at $1.4149-4152 and 127.66-70 yen against

$1.4128-4138 and 126.99-127.09 yen in New York and $1.4149-4151 and 127.94-98 yen in Tokyo late Friday.

The dollar gained support after U.S. President Barack Obama's senior adviser David Axelrod on Sunday expressed confidence that the reappointment of Fed Chairman Bernanke would be confirmed in the Senate, dealers said.

Market participants took some relief in the news, as it helped eliminate lingering uncertainties about the Fed chief's reappointment that emerged after some Democratic lawmakers expressed opposition to a second term for him.

''The talk of a heightening possibility of (Bernanke's) reappointment is a factor helping to calm the market'' although the reappointment remains uncertain, said Shuichi Kanehira, senior vice president of the foreign exchange division at Mizuho Corporate Bank.

Such news is likely to lead to dollar buying against the yen as the currency had fallen considerably against the Japanese currency recently, Kanehira added.

Japanese institutions also bought the U.S. currency after it hit a one-month low of 89.81 yen in New York on Friday on concerns over prospects for the U.S. economy after Obama called for limiting bank sizes and risk-taking financial activities, traders said.

''Domestic investors are willing to buy the dollar'' when it falls below the 90 yen line, said Koji Fukaya, senior currency strategist at Deutsche Securities Inc.

Analysts said many market participants are focusing on moves of U.S. stock markets, which fell sharply last week, and are becoming cautious about buying the dollar actively as they are still uncertain about the economic impact of Obama's proposal.

Investors are also waiting for the outcome of a meeting by the U.S. Federal Open Market Committee and the release of U.S. gross domestic product data for the October to December period later this week, analysts said.
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Publication:Japan Weekly Monitor
Date:Jan 25, 2010
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