The dollar was top-heavy against the yen at just below the 124.00 level, with the local unit supported by a rebound in Japanese equities and amid fears stocks could rise further, dealers said. They said a decision by the Bank of Japan to maintain its current monetary policy did not have a major impact to the forex market, with investors paying closer attention to an announcement concerning the government's purchase of bank shareholdings, as well as on capital injections into banks later today.
"The yen seems to be supported against the dollar... Investors are afraid of a sharp rebound after recent sharp falls on Japan's stockmaket," Hiroyoshi Kinoshita, deputy manager of forex trading group at Aozora Bank, said. "Investors are avoiding the dollar and the euro against the yen," he said.
Kinoshita said he expects dollar/yen to move in a range of 122.00-126.00 next week, adding that the dollar will continue to firm against the yen. "Even after some news reports suggested that the fire on the French oil tanker may have been caused by an act of terrorism, the dollar did not fall. I think even though there may be an attack on the US, or should (US President George W.) Bush start a war against Iraq, any associated fall in the dollar will temporary," Kinoshita said.
The dollar will also trade firmer against the euro, Kinoshita said, adding that: "The euro will continue to fail to reach parity." He said euro/dollar will move in a range of 0.9700-0.9950 next week.//www.ananova.com