9 December 2005, 11:56  Dollar advances against yen in Asian trading following revision of Japan's 3Q growth figures

The dollar rose against both the yen and euro in Asian trading Friday, gaining ground on the yen from an unexpected downward revision in third-quarter Japanese growth figures. The dollar was trading at 120.52 yen on the Tokyo foreign exchange market at 3 p.m. (0600 GMT) Friday, up 0.22 yen from late Thursday in New York. The dollar hit a 32-month high of 121.40 yen on Monday. The euro slid to $1.1805 from $1.1819 late Thursday in New York. The gains came after Japan's July-September gross domestic product was revised down to 1 percent growth at an annual pace from a preliminary 1.7 percent. Economists had expected an upward revision. The U.S. currency rose to a session high of 120.72 yen on electronic foreign exchange broker EBS as U.S. hedge funds and investment banks bought dollars, traders said. The dollar also got a boost from aggressive purchases by Japanese importers, who needed the currency for their regular monthly settlements, traders noted. Despite the weaker-than-expected GDP results, many economists remained overwhelmingly bullish about prospects for the Japanese economy. "All the key domestic demand components, the engines of the economy, are running smoothly," said Atsushi Nakajima, chief economist at Mizuho Research. "Japan remains in a firm recovery." The euro, meanwhile, moved slightly lower in Asia as U.S. investment banks and other players took profits on its overnight rise as high as $1.1850. The European currency's climb to its strongest levels since late November came after European Central Bank officials signaled more interest-rate hikes could be in the cards, which also helped to keep the euro supported in Asia, traders said.

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