October 17, 2002	Thursday	Sha'aban 10, 1423

LONDON, Oct 16: The dollar held firm against the euro on Wednesday thanks to strong gains on Wall Street, but dipped against the yen after Bank of Japan governor Masaru Hayami said the bank may consider further monetary easing.

The single European currency fell to $0.9805 from 0.9814 late on Tuesday in New York.

The dollar eased to 124.31 yen from 124.64 on Tuesday.

The US unit has gained against both the euro and yen in recent days thanks to a big bounce on US stock markets.

But the dollar rally fizzled out somewhat amid profit taking and signs that US stock markets might give up some of their gains when trading resumed Wednesday after disappointing results from US technology bellwether Intel late Tuesday.

The general dollar strength on the foreign exchange market after another strong rally in the US is being tempered by the disappointing results from Intel after the market closed on Tuesday, said Bank of Tokyo-Mitsubishi economist Derek Halpenny.

The yen also gained from comments by Bank of Japan governor Masaru Hayami that the central bank may consider further monetary easing after seeing whether the government devises concrete policy action to tackle bad loans.

But he reiterated the central bank saw no need for an immediate policy shift.

There is no fear of a lack of liquidity because the BoJ is already providing ample funds into the money market. At present there is no need to take additional monetary easing measures, Hayami told a press briefing in Tokyo.

If the government starts to implement concrete policy measures, the BoJ will watch developments and, if needed, we will consider further action. But at this moment, the BoJ is not in a position to take pre-emptive action, he said.

Audrey Childe-Freeman, economist at Canadian Imperial Bank of Commerce, said the comments marked a change in tone from the BoJ with Hayami leaving the door open for inflation targetting for the first time.

The euro was changing hands at $0.9805 against 0.9814 late on Tuesday in New York, 121.90 yen (122.35), 0.6315 pounds (0.6322) and 1.4701 Swiss francs (1.4671).

The dollar was being quoted at 124.31 yen (124.64) and 1.4990 Swiss francs (1.4945).

The pound was at 1.5513 dollars (1.5516), 192.85 yen (193.43) and 2.3260 Swiss francs (2.3194).

On the London Bullion Market, the price of an ounce of gold fell to $314.25 from 316.20 late on Tuesday. —AFP