LONDON (AFX) - The dollar held steady against the yen in midday trading, recovering some earlier losses as sentiment remained bearish for the Japanese currency, analysts said.
In overnight trading, the dollar fell below 117.00 yen on the back of comments by Bank of Japan governor Masaru Hayami, who said the yen's value was too weak.
Will Rugg, senior currency analyst at Standard & Poor's MMS, said Hayami's remarks injected more caution into yen selling. "There are fears the Bank of Japan will intervene to temper any dollar/yen upside after those comments," he said.
But there was speculation the BOJ would pump more liquidity into the market, which could weaken the yen. Hayami earlier requested an examination of how the central bank can provide liquidity more efficiently.
Elsewhere, the euro traded in a fairly narrow range. Dealers said more bad news out of the U.S. was needed to push euro/dollar higher. Analysts said yesterday's sharp decline in the Philadelphia Fed's manufactur ing business index dented enthusiasm for the dollar. With fears of a U.S. recession, today's University of Michigan consumer sentiment survey will also be closely watched.
The latest UK economic news had little impact on sterling. There was a public sector net cash requirement of 9.452 bln stg (deficit) in December, National Statistics said.
December provisional M4 money supply rose 0.7 pct from November and was 8.2 pct higher from the year-earlier period, the Bank of England said.