20 December 2001, 09:34 Forex - Dollar firms in midafternoon Tokyo, profit taking caps gains
TOKYO (AFX-ASIA) - The dollar continued to be firmer against the
yen in midafternoon trade but profit taking capped the US unit's
advance at the 128.70 level, dealers said.
They said the yen has been under pressure prior to the release of
the Bank of Japan's monthly financial report as well as reflecting some
disappointment towards the central bank's monetary easing decision
yesterday.
Daiwa Bank customer dealer Nobuki Kawashima said he expects the
dollar to reach the 129.00 level against the yen in the remaining days
of the year.
"Recently, the dollar has tended to rise against the yen when
trading volume is thin. It is possible that the dollar will reach the
129.00 level amid thin Christmas trading," he said.
He said the crisis in Argentina provided no major negative impact
to the dollar as the forex market had priced in the development.
"If this crisis spreads to other South American countries, such as
Brazil and Mexico, the dollar will definitely encounter selling
pressure. But, as it is only a problem in Argentina, I don't see any
negative impact from it to the dollar," he said.
Kawashima said the yen is also pressured by some disappointment
over a decision by the Bank of Japan yesterday to ease its monetary
policy.
"Some investors expected that there would be some announcement
related with foreign bond purchases. But as it was not included
yesterday, there seems to be some disappointment," he said.
He said that the dollar/yen trading is expected to move in the
range of 130-126.80 level for the next week.
The euro was rangebound against the yen with no fresh leads,
dealers said.
Kawashima said the euro will trade firmer against the yen for now,
adding that the euro/yen trading will move in the range of
116.00-114.00 for the next wee
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