TOKYO, Oct 23: The dollar was stronger against the yen and euro in Tokyo on Tuesday as market players gave the thumbs up to quick United States fiscal and monetary action after last month’s terror attacks, dealers said.

The dollar traded at 122.60-65 in Tokyo Tuesday against 122.42 yen in New York and up sharply from 121.58-60 yen in Tokyo late Monday.

The dollar gained momentum after rising past 122.08 yen, a key resistance point marked just ahead of the September 11, attacks, said Noboru Hayakawa, a group manager at Mitsubishi Trust and Banking’s treasury and foreign exchange division.

The US authorities took quick action in fiscal and monetary policy after the terror attacks, and it was outstanding among major economic powers like Japan and Europe, Hayakawa said.

This resulted in firm (US) stocks and currency, he said, adding the anthrax scare had already been factored into the market.

Against the yen, the euro was quoted at 109.32, against 109.29 in New York and 109.22 yen in Tokyo late Monday.

The euro was weak as the European authorities have not done enough... despite the fact that they have more liberty in monetary policy management as the inflation risk declined due to smaller-than-expected rises in crude oil prices, Hayakawa said.

DBS Bank in Singapore took a similar view, saying in a report the euro was poised to weaken against the dollar if the European Central Bank fails to cut interest rates at a meeting Thursday.

The market has been hopeful of a rate cut and not getting one would surely disappoint. We fear the blow from the ECB’s denial could be more severe, the bank said.

ABN Amro foreign exchange manager Toshihiko Masaki said the dollar firmed after breaching key resistance against both the euro and yen as long positions were unwound on waning concerns over the attacks on the US.

The market is talking about the fundamentals between the United States, Europe and Japan... but this is just an excuse to me. We have to be careful over a euro recovery from low levels, he said.

The positions accumulated after the September 11 terrorist attack — the euro-long positions and yen-long positions have been forced out. I suppose there are no more (such) positions.

Technical support was breached in the euro-dollar at 0.8990, Masaki said.

My view is that the dollar is close to the upside resistance, Masaki said, although noting the euro’s recovery may be a slow one and that the market is unhappy about the possibility of a further delay in lowering European rates.

There is a 50-50 chance for a 25 basis point cut (on Thursday) so the market has been disappointed, he said.

In late Singapore trade, the dollar was steady at 10,150 Indonesian rupiah.

It was higher at 51.81 Philippine pesos from 51.78 on Monday, 1.8258 Singapore dollars from 1.8248, 1,304.45 South Korean won from 1,303.25, 34.552 Taiwan dollars from 34.543, and 44.82 Thai baht from 44.74.—AFP