January 30, 2007	Tuesday	Muharram 10, 1428

LONDON, Jan 29: The dollar breached 122 yen for the first time in more than four years on Monday on expectations that Japan would keep its super-low interest rates, dealers said.

The euro firmed to $1.2919 in early European trading from $1.2916 late in New York on Friday.The dollar rose to 121.86 yen from 121.49 yen on Friday.

The greenback had soared as high as 122.19 yen at the start of European trading hours on Monday.

“The dollar has gained most notably against the yen this morning after more disappointing spending data from Japan,” said economist Derek Halpenny at The Bank of Tokyo-Mitsubishi.

He added: “Weak consumption and inflation data (in Japan) will encourage continued yen selling.” Japan had another dose of bad news Monday as the government said that retail sales in December declined 0.3 per cent. The second straight year-on-year fall was mainly due to weak demand for heating appliances and warm clothing.

The news “casts further doubts on a BoJ rate hike in February,” said Commerzbank currency analyst Gavin Friend.

As a result, the dollar breached 122-yen mark in Asian trading hours on Monday, the first time it has passed the psychological barrier since December 2002.

The Bank of Japan earlier this month left its benchmark interest rate unchanged at 0.25 per cent on January 18 despite earlier signals it was ready to hike it to 0.50 per cent.—AFP