TOKYO, April 1 - The dollar edged up in Asia on Tuesday with the help of fresh buying by Japanese investors at the start of the new financial year, but overall sentiment remained depressed with no quick end to the Iraq war in sight. Much of the day's foreign exchange action came early in the morning when the dollar slipped to a two-week low versus the yen -- for the second day in a row -- following mixed results of the Bank of Japan's "tankan" survey of business sentiment. But the greenback bounced back after Japan's finance minister, Masajuro Shiokawa, warned that the latest moves in the forex market were speculative and undesirable and that his ministry was ready to act to prevent rapid movements in currency rates. His comments, coupled with the Finance Ministry's confirmation on Monday that it had intervened in March by buying 1.2 trillion yen ($10 billion) of dollars and euros, raised the spectre of further intervention, traders said. But activity died down as the market digested a flurry of news and traders focused once again on the war in Iraq.
"We saw some dollar buying in the morning by Japanese trust banks but things have really slowed in the afternoon," said Hiroyuki Watanabe, forex manager at Shinsei Bank. The market reacted little to a report in the afternoon that North Korea had fired a surface-to-ship missile earlier on Tuesday. A Japanese Defence Ministry official said North Korea had fired the missile into the Yellow Sea, but added that it posed no threat to Japan. Comments by U.S. Treasury Undersecretary John Taylor also passed without denting the market. Taylor told in an interview that the U.S. Treasury and Japan's Finance Ministry were in close contact and that Tokyo's spate of yen interventions this year had no bearing on U.S. dollar policy.
As of 0541 GMT, the dollar was at 118.26/29 yen , up slightly from 118.02 yen in late U.S. trade and above a two-week low of 117.78 yen hit in early morning. But it is still nearly two yen below Monday's high above 120 yen.//