TOKYO, Dec 5: The yen remained weak against the dollar in Tokyo on Wednesday due to the gloom over the Japanese economy, dealers said.

The yen traded at 124.10-13 against the US currency against 124.11 yen in New York and 124.07-10 yen in Tokyo.

Yen-selling sentiment was growing moderately as we don’t see any factors to back the yen, considering current economic conditions, said Daiwa Bank dealer Hidenobu Fukuhara.

Japan’s gross domestic product data to be released on Friday will show a quarter-on-quarter contraction of around 0.6 per cent over July-September, according to the market consensus of analysts.

The world’s second largest economy shrank 0.7 per cent in the three months to June. Two consecutive quarters of decline are widely defined as recession.

But at the same time, we cannot continue buying the dollar because some players regard growing tensions in the Middle East as an element to sell the unit, Fukuhara said.

They need funding. There’s a lot of yen in Japan, but they also have to pay back some of their loans in dollars, Fukuda said.

ABN Amro foreign exchange manager Toshihiko Masaki, however, said dollar buying was limited around the 125-yen level.

Meanwhile, the euro was relatively unchanged as traders hesitated to take strong positions ahead of the currency’s physical debut in Europe in January.

The euro bought $0.8930-33 against $0.8904 in New York and $0.8911-14 in Tokyo late Tuesday.

Against the yen, the euro was quoted at 110.85, compared to 110.61 in New York and 110.66 in Tokyo Tuesday afternoon.

The European Central Bank meets Thursday to deliberate on interest rates but expectations of a rate cut are low, analysts have said.

Whether or not the ECB is having a meeting or not, it is not going to be critical for the market, said a BNP Paribas dealer is Singapore.

In late Singapore trade, the dollar fell to 51.96 Philippine pesos from 52.025 on Tuesday, 43.965 Thai baht from 44.06, 1.8352 Singapore dollars from 1.8377, and 34.442 Taiwan dollars from 34.4585.

It rose to 10,483 Indonesian rupiah from 10,470 and 1,271 South Korean won from 1,270.80.—AFP