London, March 23 (Bloomberg) -- The yen rose against the dollar for the firsttime in three days after Japanese Prime Minister Yoshiro Mori said Japanwon't weaken its currency to lift exports. ``The comments from Mori were enough to push the yen higher,'' after recentspeculation the yen would be allowed to devalue, said Shahab Jalinoos, acurrency strategist at UBS Warburg. ``We're looking for the yen to correctdown to the 120 level. The market is looking for reasons to take some profitson the dollar's rise.'' The yen rose to 123.01 for a dollar from 123.96 in late London tradingyesterday, after losing 1.2 percent in the previous three days. The yen waslittle changed against the euro at 109.90 from 110.05. The euro rose to 89.38U.S. cents against the dollar from 88.72 yesterday. The Bank of Japan has cut interest rates to near zero, leaving little or noroom for further credit easing to boost the economy. Some investors andanalysts say a weaker currency may be the only hope for Japan's stagnatingeconomy, helping make Japanese exports more price-competitive overseas. ``Japan, first of all, has no plans to make the yen weaker to promote itsexports,'' Mori told a parliamentary committee early today.
Mori and Bush
``Mori's comments dashed expectations Japanese government mayintentionally guide the yen lower to near 130 per dollar,'' said Kenji Takei, acurrency sales vice president at Societe Generale SA in Tokyo. Mori also said he and U.S. President George W. Bush didn't discusscurrency exchange rates during their meeting this week in Washington.Speculation Mori and Bush will agree to let the yen weaken at the meetinghelped push the yen down last Friday. The euro rose against the U.S. currency from near a three- month low aftercomments from European Central Bank officials and a cut in interest ratesfrom the Swiss National Bank increased speculation the ECB may cut ratesin coming weeks. ``A cut in rates will provide some support for the euro,'' said GeraldineConcagh, a senior economist at Allied Irish Banks. ``Long-term growthprospects are moving currencies. If it was the interest rate differentials, thenthe euro would have already benefited against the dollar, but it hasn't.''Concagh said the euro would trade between 88 and 92 cents in the comingweeks. ``While we were very, very worried about inflation a month or a month and ahalf ago, we're not any more,'' said Bank of France Governor Jean-ClaudeTrichet, who is on the ECB's 18-member governing council.
Swiss Bank
The SNB yesterday lowered its benchmark interest rate by a quarter point asEurope's most export-reliant nation responded to the worldwide economicslowdown. The move left the ECB as the only major central bank that hasn'treduced rates to counter an economic weakening. ``The ECB are gently easing the market into the idea they are cutting rates,''Concagh said. ``The Swiss Central Bank increased the pressure on the ECBto cut.'' She sees the ECB cutting rates early in the second quarter. Still, some analysts the euro slipping as any ECB cut will come too late toprevent a slowing in growth in the euro zone. ``The market is waking up to the fact that it was over- optimistic the eurozone could withstand a global slowdown,'' said Jalinoos at UBS Warburg.``The ECB is seen as the central bank most behind the curve.'' He sees theeuro moving lower to 88 U.S. cents in coming weeks. Recent reports this week showed French consumer spending fell inFebruary, business confidence among German executives fell to the lowestlevel since July 1999, while Germany's economy expanded just 0.2 percentin the final quarter. ``The ECB is the counterbalance to the U.S slowdown but its'' delaying toolong cutting rates, said Gerard Gardner, a currency strategist at MorganStanley Dean Witter. ``If they do miss this thing, the political nature ofEurope will weigh on the euro.''