27 December 2001, 08:50  Forex - Yen lower in midafternoon Tokyo in absence of exporter purchases

TOKYO (AFX-ASIA) - The yen was lower against the dollar in quiet midafternoon trade, with speculative play against the Japanese unit continuing from the morning session, dealers said. They said the absence of active yen-buying by Japanese exporters also weighed on sentiment. Dealers said the strong-dollar trend against the yen is expected to continue for the time being due to signs of further weakness in Japanese economic data as well as speculation that the Finance Ministry will tolerate a dollar/yen level of up to 140.00. The Nihon Keizai Shimbun reported today that unemployment is expected to reach a seasonally-adjusted record high of 5.5 pct in November, up 0.1 percentage point from the previous month. Vice Minister of Finance Haruhiko Kuroda said the government's foreign exchange policy remains unchanged and that the dollar/yen rate should reflect domestic economic fundamentals. A dealer with a Japanese trust bank said it is possible for the dollar/yen rate to reach the 131.90 level by tomorrow. "Because of end-of-year trading, there is no active yen-buying from Japanese exporters. In addition, it appears some investors are trying to trigger stop-loss selling of the yen as well. If we consider these factors, it is possible that dollar/yen will reach 131.90 level by tomorrow," the dealer said. In addition, he said investors expect Japanese authorities to tolerate a fall in the yen, adding that the authorities may accept a level in the range of 135-140. The dealer said it will be some time before the dollar hits 132.00 yen. "When the dollar reached the 131.00 level, there was very strong resistance at around 130.90-95. I think the dollar will encounter such a resistance again," he said. The dealer said investors are also awaiting US non-farm payroll data expected next Friday. "Even if the data comes in weaker-than-expected, current strong-dollar sentiment will continue," he said, adding that the dollar will be supported firmly against the yen for the time being.

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