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Dollar rises to lower 94 yen on dip-buying, sentiment remains bullish.

TOKYO, April 7 Kyodo

The dollar rose to the lower 94 yen zone Wednesday morning in Tokyo on dip-buying, while the minutes of a U.S. Federal Reserve policy meeting, released overnight, did not change the bullish sentiment about the dollar.

At noon, the dollar fetched 94.17-19 yen versus Tuesday's 5 p.m. quotes of 93.73-83 yen in New York and 93.85-86 yen in Tokyo.

The euro traded at $1.3384-3389 and 126.06-09 yen against late Tuesday's quotes of $1.3395-3405 and 125.60-70 yen in New York and

$1.3413-3415 and 125.88-92 yen.

The dollar fell to the mid-93 yen line earlier in the morning but investors bought it back on dips amid continued market perception that the currency will trend upward, dealers said.

The minutes of the Fed's policy meeting in March ''did not show a big change and it is hard to sell the dollar as sentiment is likely to remain bullish,'' said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp.

The minutes showed that Fed policymakers agreed that economic conditions were likely to warrant exceptionally low levels of federal funds rate ''for an extended period.''

''The market has taken the Fed's language of 'an extended period' to mean that interest rates will continue to be low for six months or so, but the minutes also showed it depends on the economic conditions. So the focus from now is on the next meeting in late April.''

Analysts said although the dollar has underwent a small adjustment after failing recently to climb into the 95 yen territory, the currency will likely trend upward because the U.S. economy is recovering and U.S. Treasury yields are expected to remain high.

The euro rose against the yen and steadied against the dollar after the single European currency fell sharply the previous day on rekindled worries about debt-ridden Greece, dealers said.

The euro was stung Tuesday by news reports that Greece is hoping to amend an aid deal reached at last month's European Union summit due to the implications of the International Monetary Fund's involvement.
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Publication:Japan Weekly Monitor
Date:Apr 12, 2010
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