TOKYO, Oct 9: The dollar rose slightly against the yen on Tuesday supported by fears of intervention by the Bank of Japan but concerns over the US-led war on terrorism capped gains, dealers said.
The greenback was trading at 120.10-13 yen in Tokyo on Tuesday, up from 119.85 yen in New York and 119.86 yen in Singapore late Monday.
Markets in Japan were closed Monday for a public holiday.
Everyone had expected this (attack) so only a modest sell-off was seen, though (the dollar/yen) is still 50 points lower than last Friday, said Standard and Poor’s MMS managing analyst Hideki Naito.
Japan’s finance ministry has intervened through the central bank repeatedly to sell the yen in the weeks following the September 11 terror attacks in New York and Washington which triggered this week’s reprisals.
Japanese people expect some intervention around the 119.60 yen area, said HSBC foreign exchange manager Michiko Fukuda.
Finance Minister Masajuro Shiokawa said earlier Tuesday the government would continue to intervene if necessary in the currency market on its own account, rather than as part of any concerted international action.
Although the current forex market is relatively subdued, with no abnormal moves, we need to monitor closely the world currency markets and be cautious over possible movements, he said.
Group of Seven governments had agreed to intervene in the market to stabilise currencies, if necessary, based on their own judgement, he said.
This means we will not conduct concerted intervention.
A G7 meeting in Washington of finance ministers and central bankers over the weekend provided no new trading leads, dealers said. The focus instead is on Afghanistan and uncertainty about how long the military action would last.
The strikes kept the euro rangebound against the dollar and the yen, dealers said.
The European unit bought $0.9210-13 compared with 0.9201 in New York and 0.9190 in Singapore late Monday.
After the G7 meeting and after the start of the attacks investors can’t move, Yamanaka said.
But others speculated the euro might see some gains.
The euro is still being supported and is likely to test 0.9240-80, a dealer at BNP Paribas in Singapore said.
Against the yen, the euro was quoted at 110.67 against 110.27 in New York and 110.15 in Singapore late Monday.
In Singapore late trading, the dollar rose to 10,105 Indonesian rupiah from 10,100 on Monday, 51.80 Philippine pesos from 51.60, 1.7986 Singapore dollars from 1.7937 and 34.555 Taiwan dollars from 34.547.
The greenback fell to 1,307.9 South Korean won from 1,310.43 and 44.795 Thai baht from 44.805.—AFP
