/www.fxserver.com/ The dollar eased back within a range in late morning, with attention focused on US currency policy and economic data after the appointment of railroad executive John Snow as Treasury Secretary, dealers said.
Investors are also watching for any further suggestions on who may take over from Bank of Japan governor Masaru Hayami in March and whether the replacement will be an advocate of more radical monetary easing.
"In the short term the market will pay attention to comments by Snow," said Satoru Ogasawara, forex strategist at Credit Suisse First Boston, after recent speculation his appointment marks a weakening of the US strong-dollar policy.
"He was the chairman of the Business Round Table (which) will continue to say the dollar-yen is overvalued considering the current account deficit and the capital inflow to the United States," he said.
"The focus will be on the (US) current-account balance due out today, the market is expecting the deficit to further rise to a record high. That is weighing on the dollar," he said.
"At home the major focus will be on who will replace the BoJ governor. (Prime Minister Junichiro) Koizumi says that he hopes the person will be pro anti-deflation," Ogasawara added.
"The market will focus on who will be appointed and his stance on monetary policy. That is the reason why the dollar-yen is directionless today, moving in a range," he said, adding the market is also quiet towards the year-end.
Koizumi's comments on the desire for a weaker yen had little impact.
"Japanese authorities have made it clear they want a weaker yen. So it is not really new information for the market that Koizumi favours a weaker yen. Comments by Finance Ministry officials are more influential," he said.
Investors are also cautious ahead of the Bank of Japan's Tankan survey of business conditions due tomorrow morning.
"The majority think corporate sentiment improved slightly from the September survey. But the (overall) slow down in recovery has already been discounted by the market," Ogasawara said.
Tokyo 11.00 am Sydney 10.50 am New York 3.00 pm
Dollar
yen 123.37 down from 123.70 123.61
sfr 1.4617 down from 1.4619 1.4617
Euro
usd 1.0085 up from 1.0082 1.0081
stg 0.6405 up from 0.6399 0.6391
yen 124.41 down from 124.73 124.61
sfr 1.4741 up from 1.4740 1.4741
Sterling
usd 1.5745 down from 1.5756 1.5764
yen 194.24 down from 194.64 194.93
sfr 2.3014 up from 2.2964 2.3044
Australian dollar
usd 0.5610 up from 0.5606 0.5603
stg 0.3563 up from 0.3559 0.3552
yen 69.21 down from 69.34 69.28