October 20, 2001	Saturday	Shaba'an 2, 1422

TOKYO, Oct 19: The dollar was stuck in a tight range on Friday as traders remained uncertain over the outcome of the US-led war on terrorism, discounting negative comments from Japanese officials about the economy.

The greenback traded at 121.17-20 yen in Tokyo on Friday against 121.11-14 in New York and 120.93-95 yen in Tokyo late Thursday.

Japanese State Minister for Economic and Fiscal Policy Heizo Takenaka said Friday the world’s two largest economies would likely post negative growth in the next two quarters, adding the situation was severe after last month’s attacks on New York and Washington.

There is a possibility that US GDP (gross domestic product) growth will be negative in the third and fourth quarters, Takenaka told a regular news briefing. It is unavoidable that Japanese GDP growth will also become negative.

However, Standard and Poor’s MMS managing analyst Hideki Naito said traders took very little notice of comments by politicians.

Traders are not seriously concerned with Japan’s fundamentals, said Naito. Their focus is on developments in Afghanistan and bioterrorism.

The market was also unphased by statements from Finance Minister Masajuro Shiokawa that Tokyo was not attempting to weaken the yen excessively, but that the rate should reflect economic fundamentals.

Hideyuki Tsukamoto, manager of the foreign exchange department of Fuji Bank, said the comments had very little impact.

It’s not as if the yen is going to get stronger based on those comments, Tsukamoto said. On the other hand, it’s a matter of course that the government will allow the natural appreciation of the dollar against the yen.

Shiokawa also indicated a supplementary budget, planned at $22.3 billion would be large enough to encompass measures to deal with the country’s mad cow crisis and anti-terrorism measures.

There is a lot of material out there, but the focus is on the terrorist attacks and worries about the prospect for a US economic recovery, said Yasuji Yamanaka, foreign exchange manager at Nikko Trust and Banking.

Naito added the static market situation was likely to continue, but that some speculatory trading may begin next week or the week after ahead of Thanksgiving Day in November, when most traders closed their positions.

Meanwhile the euro was stable against the dollar in Tokyo, buying $0.9016-20 in Tokyo, compared with $0.9043-46 in New York and $0.9020-22 in Tokyo late Wednesday.

In Tokyo, the euro was quoted at 108.928 at 5 pm against the yen, compared with 109.60 in New York and 109.04 yen in Tokyo late Wednesday.

In late Singapore trade, the US dollar was stronger at 51.7625 Philippine pesos from 51.645 on Thursday, 1.8204 Singapore dollars from 1.8137, 1,302 South Korean won from 1,298.6499, 34.5385 Taiwan dollars from 35.5405, and 44.755 Thai baht from 44.695.—AFP