REFILING: Dollar hovers in upper 81 yen zone with focus on U.S. monetary easing.
(EDS: FIXING DATE IN LEAD GRAF)
The U.S. dollar hovered narrowly in the upper 81 yen zone Wednesday in Tokyo as speculation about further monetary easing by U.S. authorities dominated the market, although the U.S. currency took a brief respite from wariness about Japanese intervention.
At 5 p.m., the dollar was quoted at 81.88-91 yen versus 81.65-75 yen in New York and 81.92-94 yen in Tokyo at 5 p.m. Tuesday.
The U.S. unit moved between 81.74 yen and 82.01 yen, trading most frequently at 81.80 yen.
The euro traded at $1.3993-3996 and 114.60-64 yen against
$1.3919-3929 and 113.80-90 yen in New York and $1.3813-3814 and 113.16-20 yen in Tokyo late Tuesday.
After struggling in the upper 81 yen range throughout New York trading, the dollar regained some ground and rose to the 82 yen line on speculation that Japan might conduct another round of yen-selling intervention, following remarks in the Diet by Japanese monetary authority officials, dealers said.
Speaking at a lower house committee session, Finance Minister Yoshihiko Noda hinted at intervening in the currency market, saying Japan will take decisive steps if necessary, while Bank of Japan Governor Masaaki Shirakawa said the central bank is following currency moves with great interest.
But the dollar's rise was brief and limited as the remarks lacked the power to lift it further as Tuesday's release of Federal Open Market Committee minutes had fueled speculation that the U.S. Federal Reserve could take further monetary easing steps soon.
''While there was nothing new (about the content of the minutes), market players reaffirmed that unless the upcoming U.S. economic data beat market expectations, (the Fed) will take further easing steps,'' said Yuki Sakasai, foreign exchange strategist at Barclays Bank.
The FOMC minutes from the Sept. 21 meeting showed that members of the committee felt they may soon need to take steps to help the sluggish U.S. economy, mentioning further purchases of longer-term Treasury securities among possible monetary easing steps.
Noting that market players already expect the Federal Reserve to take additional easing steps in November, Satoru Ogasawara, vice president of Economic Research at Credit Suisse, said the market focus will be on news on ''how the Fed would do it'' from now on.
The euro rose against the dollar and the yen as investors picked up the common currency on remarks by European Central Bank members indicating that they may be reluctant to take easing steps, dealers said.