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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