TOKYO, Nov 22: The dollar firmed against the yen late on Thursday after fluctuating from the collapse of a Japanese insurer and reports about the Bank of Japan’s (BoJ) possible purchase of foreign bonds, dealers said.

The dollar stood at 123.20-23 yen after moving between 122.99 yen and 123.34 yen, compared with 123.10-20 yen in New York and 123.31-34 yen in Tokyo late Wednesday.

There will be no trading in Tokyo Friday for a public holiday. New York will return from the Thanksgiving break on Thursday.

The greenback recouped some of its earlier losses against the Japanese currency in late trading as European players bought the euro in bulk in exchange for the yen, said ABN Amro foreign exchange head Toshihiko Masaki.

Foreign players tend to be bearish toward the yen and they opt to sell it at high levels, he said. Earlier in the day, investors liquidated dollar-long positions ahead of the holiday, Masaki said.

United States hedge fund investors, who have recently been supporting the dollar, sold the greenback and helped offset the negative impact of news a Japanese insurer filed for bankruptcy in the morning, he said.

Mid-sized insurer Taisei Fire and Marine Insurance Co. Ltd. said it had filed for bankruptcy protection due to massive payments related to the attacks in the US.

The yen was initially sold on a news report the BoJ has raised the possibility of buying foreign bonds, with the US government welcoming the move.

The Financial Times (FT) reported, without citing sources, it was a move that would signal their commitment to further ease monetary policy and push the yen lower.

Bank of Tokyo-Mitsubishi chief foreign exchange analyst Koji Fukaya said the dollar firmed in late trading as European players came into market.

The FT report might have some impact while the failure of the non-life insurer was a kind of topic which turns off foreign investors, he said. Apart from that, the market was very quite ahead of three consecutive days off.

The euro bought $0.8772-75 against $0.8784 in New York and $0.8807-10 in Tokyo late Wednesday.

The euro was lower on concerns over the European economy, reflected in weak German Ifo business sentiment data.

The euro basically continued the trend that has been seen since last night, Fukaya said.

This would weigh further on the euro given that the market would be increasingly concern that Euroland’s economic recovery could significantly lag that of the US, the Singapore-based bank said.

Against the yen, the euro was quoted at 108.10, slightly up from 108.05 three hours earlier. It compared with 108.19 yen in New York and 108.65 in Tokyo Wednesday afternoon.

In late Singapore trade, the US dollar fell to 51.99 Philippine pesos from 52.04 on Wednesday, 44.36 Thai baht from 44.38, 1,277.25 South Korean won from 1,280.3001 and 1.8386 Singapore dollars from 1.8396.

It rose to 10,507 Indonesian rupiah from 10,415, and 34.4775 Taiwan dollars from 34.4770.—AFP