13 December 2005, 09:53  US dollar easier vs yen in Tokyo early afternoon trade

Тhe US dollar was softer against the yen in early afternoon trade here, on lingering conjecture that the US Federal Open Market Committee (FOMC), which meets today, may signal an end to its cycle of increases in interest rates, dealers said. At 1.00 pm (0400 GMT) here, the dollar stood at 119.71 yen, after moving in a range of 119.68-120.00 yen during Asian trading hours. About four hours earlier in Sydney, it was at 119.95 yen. The euro was quoted at 1.1962 usd, compared to 1.1948 usd in Sydney. While the market has fully factored-in the FOMC raising the Federal Reserve's key interest rate by another 25 basis points, dealers said, trading in New York overnight saw the US unit tumbling to 119.53 yen, with investors trimming their long-dollar positions in anticipation of a less hawkish statement from the FOMC meeting. Despite clawing back some of its losses against the yen in early Asian trading, the dollar was still pressured by expectations of a less hawkish statement by the FOMC. Dealers also said caution expressed by a Chinese official over his country's dollar exposure also helped weigh on the dollar. Yu Yongdong, a government economist and chief consultant to the central bank, told Market News International that China needs to reduce its accumulation of dollar-based assets and cut its existing holdings.

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