27 August 2001, 09:20 Forex - Dollar lower vs yen in midafternoon Tokyo on exporters' selling
TOKYO (AFX-ASIA) - The dollar turned lower against the yen in
midafternoon trade, pressured by selling among exporters, dealers said.
However, they added that overall trading was very quiet, as
investors are reluctant to take any fresh positions ahead of US second
quarter revised GDP data Wednesday, as well as an ECB governing council
meeting Thursday.
A dealer at Shinsei Bank said that he expects dollar-selling will
be short-lived after the revised GDP data, even though it is expected
to show negative growth.
"A negative second quarter GDP figure (would) indicate that
reduction of inventories in the US proceeded well during the period. I
think a minus figure (would) provide a positive impact to third quarter
growth in the US," the dealer said.
He said the dollar/yen will move in the range of 118.00-121.50 this
week, adding that the governemnt will cary out verbal interventions at
around the 118.00 level.
"I think Japanese authorities will step into the market (to sell
yen) at around the 115.00 level," the dealer said.
According to the local media reports this morning, Deputy Finance
Minister for International Affairs Haruhiko Kuroda said the current
rise on the yen is not 'appropriate' when current Japanese fundamentals
are considered.
"It is true that the worldwide economy is not strong. However, the
Japanese economy is not strong either ... I cannot find any reasons for
the yen to become stronger," Kuroda was quoted as saying.
The dealer said: "I think Japanese officials will send a message
that market participants should look at economic indicators which show
Japan's weak fundamentals."
Local media reports have earlier forecast that July unemployment,
which will be released tomorrow, will rise to 5.0 pct level.
The dealer said he expects that the ECB to hold its rate unchanged
this week, citing strong M3 data.
A majority of market participants expect the ECB to cut its rate by
25 basis points this week.
"If considering the strong M3 data, I don't think the ECB is ready
to cut its rate. I think the ECB will decide to cut 25 basis points in
September," the dealer said, adding that the euro/dollar will move in
the range of 0.9000-0.9300 this week.
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