December 5, 2001	Wednesday	Ramazan 19, 1422

TOKYO, Dec 4: The dollar inched up against the yen on Tuesday as dollar-buying sentiment remained strong after tensions mounted in the Middle East, dealers said.

The greenback was quoted at 124.07-10 to the Japanese currency against 124.06 in New York and 123.63-66 in Tokyo late Friday.

We did not see any particular trading direction today, but dollar-buying sentiment was still firm as there are some uncertain factors, including the Middle East issue, said Sanwa Bank dealer Yasuo Kayamoto.

Israel decided Tuesday to step up military operations against Yasser Arafat’s Palestinian Authority following the suicide bombings by Palestinian Islamic radicals that killed 25 Israelis.

The impact of a decision by Moody’s Investors Service to cut Japan’s sovereign debt rating was limited on the foreign exchange market, dealers said.

Moody’s downgrade had no direct impact on the yen since there were rumours in the market yesterday the agency would downgrade Japanese bonds, said Hideyuki Tsukamoto, dealer at Fuji Bank.

The downgrade was not a surprise for the market, Tsukamoto said.

Moody’s lowered Japan’s yen-denominated domestic securities rating to Aa3 from Aa2, citing weak Japanese economic fundamentals and a lack of effective government policies to restore growth.

Dealers also said the greenback held firm after strong data on US consumer spending and a better-than-expected report on US manufacturing activity, dealers said.

The trend here is a strong dollar against a weak yen. The dollar got a boost from the good US economic data, Tsukamoto said.

In Washington Monday, the Commerce Department said US consumer spending jumped 2.9 per cent in October, the steepest rise since the government started its records in 1959.

Separately, a survey by the National Association of Purchasing Management (NAPM) showed a closely-watched index of US manufacturing activity surged in November.

The purchasing managers’ index rose to 44.5 in November, up 4.7 points from October, the survey said. The figure was better than expected on Wall Street where economists had been tipping a figure of 42 points.

These indicators fueled expectations for a US economic recovery, underpinning the dollar, said Naoya Murata, dealer at Sanwa Bank.

The euro bought $0.8911-14 against $0.8915 in New York and $0.8952-55 in Tokyo late Monday.

The euro was pressured against the dollar as investors bought the US unit on the strong US economic data, Sanwa’s Murata said.

Against the yen, the euro was quoted at 110.66, compared to 110.62 in New York and 110.79 in Tokyo Monday afternoon.

In late Singapore trade, the dollar fell to 52.025 Philippine pesos from 52.073 the previous day and 10,470 Indonesian rupiah from 10,492.50.

The greenback rose to 44.06 Thai baht from 43.94, 1.8377 Singapore dollars from 1.8337, 1,270.80 South Korean won from 1,269.80 and 34.4585 Taiwan dollars from 34.4525.—AFP