February 25, 2006	Saturday	Muharram 26, 1427

LONDON, Feb 24: The dollar overcame poor US economic data on Friday and edged higher against the euro but the day’s big winner here was the yen, supported by speculation the Bank of Japan might tighten monetary policy.

The single European currency in late-day trade was at $1.1879 after $1.1921 late Thursday in New York.

The dollar meanwhile fell to 116.93 yen in late-day trade against 117.09 on Thursday.

Analyst Neil Mellor at the Bank of New York said markets were nearly certain that the Bank of Japan will end its policy of flooding the market with excess liquidity and that speculation is now focused on how soon the central bank will abandon its zero rate policy.

“With the end of the BoJ’s quantitative easing policy all but assured over the next few weeks, the markets have taken to pondering phase two of the monetary policy normalisation process — the abandonment of the zero interest rate policy,” he said.

The rhetoric from BoJ policy makers over the past few weeks has heightened market expectations that the central bank’s plans for change may kick in somewhat swiftly, he added.

Expectations are running high that the BoJ policy meeting that concludes on March 9 will bring about some change.

That aside, talk that China may be preparing to let the yuan appreciate further in the face of growing US pressure also helped prop up the yen.

On the London Bullion Market, the price of an ounce of gold rose to $554.15 per ounce from $551.20 on Thursday.

—AFP