3 October 2001, 12:51  Dollar steady against yen in Tokyo

TOKYO, Oct. 3 (Kyodo) - By: Noriko Sato The U.S. dollar was steady against the yen Wednesday in Tokyo on views the Bank of Japan (BOJ) will continue to firmly support the U.S. currency. At 5 p.m., the dollar was quoted at 120.84-87 yen compared with Tuesday's 5 p.m. quotes of 120.75-85 yen in New York and 120.80-83 yen in Tokyo. During the day, the dollar moved between 120.46 yen and 121.05 yen, trading most frequently at 120.90 yen. The dollar carried on the overnight trend in New York, where it temporarily touched 121.14 yen on widespread expectations the BOJ will intervene to counter any declines in the dollar. On Tuesday, Japanese Finance Minister Masajuro Shiokawa reiterated that intervention will occur if the yen should gain against the dollar. The BOJ is estimated to have bought a record total of around 26 billion dollars in its repeated yen-selling interventions since the Sept. 11 terror attacks on the United States. In Tokyo, the dollar hovered at the upper half of 120 yen for most of the day. It temporarily touched 121 yen for the first time in Tokyo since Sept. 11, but was pushed back on heavy selling led by Japanese exporters. The dollar was little affected by the U.S. Federal Reserve move Tuesday to cut the key federal funds target rate by 0.50 percentage point to 2.5%. "A rate cut by half a percentage point had already been discounted by the market and it had little impact," said Shoichi Sakato, a dealer at Toyo Trust & Banking Co. The New York stock market failed to respond to the rate cut as it was within expectations. Nonetheless, the Dow Jones Industrial Average rallied toward the end of the session, rising 113.76 points to 8,950.59 on buying-on-dips. Dealers said the euro's advances against the yen contributed to the dollar's strength against the Japanese currency. The euro climbed to the middle of 111 yen for the first time in Tokyo in about five months. Dealers said the European currency is seen as a good buy amid worries about both the U.S. and Japanese economies. At 5 p.m., the euro was $0.9222-9225 and 111.46-50 yen compared with $0.9185-9195 and 110.95-111.05 yen at 5 p.m. Tuesday in New York. U.S. funds and some Japanese institutional buyers are increasingly taking long positions in the dollar against the yen, dealers said. "Speculative moves have become notable since yesterday, and it's likely that some players will try take the dollar to 122 yen," said Sakato. "But there are not enough factors to buy the dollar above that line."

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