/www.fxserver.com/ The dollar/yen was stable in late trade, with the downside holding firm despite the bombing of a Bali nightspot that killed more than 180 people, many of whom were Australian, dealers said.
US President George Bush has said he assumes the bombing was carried out by extremists linked to al-Qaeda. The main impact in the foreign exchange market was on the Australian dollar and Asian currencies.
"I had thought the dollar would be sold but the dollar/yen was very stable so I think the market will try the upside," said Tatsuo Karitani, foreign exchange manager at Mizuho Corporate Bank.
Deputy Finance Minister for International Affairs Haruhiko Kuroda also reportedly said this morning the yen is still in a correction phase.
However, Karitani said the dollar and euro are likely to face strong upside resistance against the yen in the near-term, given current technical positions, as well as expected policy announcements in Japan.
"We have many offers from exporters at 124.50-126.00 yen so we cannot make dollar/yen long positions, even though I feel the downside was very stable," he said, adding the euro appears also to be top-heavy.
"The euro/yen is very, very strong so it's very high risk to try the dollar/yen and euro/yen upside," he said.
"This week we have to take care over the anti-deflation package. If there is some good announcement, the Nikkei could be bought as well as the yen."
The dollar faces immediate technical resistance at its recent high of 124.63 yen, followed by 125.00, where Asia-based investors are protecting large options positions, dealers said.
The euro faces resistance at 123.00 yen and then at around every 50 points.
Tokyo 10.55 am New York 4.33 pm London 4.33 pm
Dollar
yen 124.46 up from 124.32 124.17
sfr 1.4804 down from 1.4814 1.4825
Euro
usd 0.9879 up from 0.9870 0.9872
stg 0.6346 up from 0.6334 0.6337
yen 122.95 up from 122.70 122.54
sfr 1.4624 up from 1.4621 1.4627
Sterling
usd 1.5566 down from 1.5582 1.5572
yen 193.73 up from 193.72 193.31
sfr 2.3043 down from 2.3083 2.3076
Australian dollar
usd 0.5449 down from 0.5466 0.5469
stg 0.3500 down from 0.3508 0.3512
yen 67.81 down from 67.95 67.90
© AFX News