15 August 2001, 09:43 Forex - Dollar hovers around mid-121 yen in thin midafternoon trade
TOKYO (AFX-ASIA) - The dollar drifted higher against the yen in
thin midafternoon trade but still hovering around the mid-121 yen
level, with few fresh leads after yesterday's surprise BoJ easing,
dealers said.
"The greenback fell to 121.37 yen in the morning as Japanese
institutional investors increased dollar selling, transfering dollar
receipts on their US bond-holdings," Industrial Bank of Japan forex
manager Tatsuro Karitani said.
"The dollar is in a downward correction phase as hedge funds who
had leaned toward long-dollar positions are selling the currency," he
said.
"That was why the dollar slipped to the 121 yen level in New York
overnight after the dollar surged to the 123 yen mark just after the
Bank of Japan's unexpected decision to further relax its monetary
policy yesterday."
Karitani said the euro tested its recent highs against the dollar
but then lost momentum on options-related selling.
"The euro is still hovering at high levels. In the afternoon, the
market tested the important level of 0.9052 to the dollar, at which
point some options traders are believed to have sold.
"The euro is in an upward correction phase in the long run, after
posting an all-time low of 82 cents due to the difference in the
strength of the economies in the US and euro-zone area," he added.
"The euro has maintained its strength against other major
currencies in recent weeks. At present, the dollar/yen's limited
advance has affected the euro/yen but it will eventually turn upward,"
he said.
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