TOKYO, Nov 21: The yen fell back against the dollar in Tokyo on Wednesday on a mid-afternoon report that global risk evaluator Standard and Poor’s (S and P) hinted at downgrading Japanese bonds, dealers said.

The Japanese currency was quoted at 123.31-34 to the dollar down from 122.66 in New York and 123.05-07 in Tokyo late Tuesday.

Earlier in the day, the yen peaked at 122.53 to the dollar.

Investors dumped the yen following the S and P news, said Yoshitaka Noumi, dealer at Bank of Tokyo-Mitsubishi.

In an interview with Jiji Press News agency, S and P’s Japanese representative Chang Yu-Tsung hinted the rating agency might further downgrade Japanese government bonds.

There is a possibility of downgrading Japanese bonds, Chang was quoted by Jiji Press as saying.

In February, S and P lowered Japan’s long-term local and foreign currency sovereign credit ratings to double-A-plus from triple-A, citing Japan’s high debt levels and sluggish pace of structural reform.

The S and P warning spooked investors, pushing the yen to the 123 level quickly, Noumi said.

Meanwhile, the euro bought $0.8807-10 down from $0.8829 in New York and $0.8829-31 in Tokyo late Tuesday.

The euro was also under pressure against the dollar in line with the yen-dollar trading, Noumi said.

Investors also took a wait-and-see stance on the euro ahead of the release of German Ifo index business confidence numbers later Wednesday, Fuji Bank dealer Atsushi Komatsu said.

The market appears to have already digested the expected weak Ifo figures, Komatsu said. Before the release, though, players are sidelined from euro trade.

The euro wavered between 0.8815-0.8835 in quiet Singapore trade and is expected to fall against the dollar this afternoon.

Nothing much has been happening this morning. It’s been very quiet. Most people are waiting for the German Ifo figure, said a BNP Paribas dealer.

Morale is low and I expect the euro to trade a bit lower in the afternoon.

Against the yen, the euro was quoted at 108.65 around 5 pm, against 108.24 yen in New York and 108.67 in Tokyo Tuesday afternoon.

In late Singapore trade, the US dollar fell to 52.04 Philippine pesos from 52.15 on Tuesday, 44.38 Thai baht from 44.42, 10,415 Indonesian rupiah from 10,563 and 34.477 Taiwan dollars from 34.483.

It rose to 1,280.3001 South Korean won from 1,279 and was unchanged at 1.8396 Singapore dollars.—AFP