15 October 2001, 09:33  Forex - Major currencies flat in midafternoon Tokyo on lack of leads

TOKYO (AFX-ASIA) - Major currencies were flat on a lack of leads, with investors cautious of developments in the US, given the possibility of further anti-US attacks and the uncertainty over the economic fallout, dealers said. The dollar rebounded to above 121.00 yen this morning on the back of today's current account data -- which confirmed the sharp year-on-year decline in Japan's surplus -- and the weakness in local equities due to profit-taking, they said. The August current account surplus narrowed to 708.6 bln yen from 971.8 bln a year earlier, according to Ministry of Finance figures. The dollar strengthened overseas Friday after US consumer confidence data came in above expectations, with the impact of the Sept 11 attacks now more muted than expected, dealers said. However, any further upside seemed to be limited, they said. "We have to wait for the New York market and the prospect of further bombing (of Afghanistan)," the head of forex department at a major Japanese bank said. "Actually, there's nothing special." The market is currently trying to find fresh trading leads as the US-led attacks on Afghanistan and the potential reaction from groups surrounding Osama bin Laden are unpredictable but could have global repercussions, the trader said. "Nobody can see the fundamentals. The problem is all over the world." Federal Reserve chairman Alan Greenspan's testimony set for Wednesday night may provide clues to how much longer the central bank would cut rates. "He has to do something and the sentiment in the market is for 25 basis points but everyone's thinking about another cut afterwards," the dealer said.

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