31 August 2001, 09:31 Forex - Yen higher vs dollar in midafternoon trade on exporter-led buying
TOKYO (AFX-ASIA) - The yen continued higher against the dollar in
midafternoon trade on extended buying from exporters, dealers said.
However, the yen turned top-heavy at around the 118.70 level during
afternoon trade on intervention concerns, they said.
MMS Asia Pacific forex analyst Hiromi Ookawara said he is skeptical
about actual intervention by the Ministry of Finance, despite Finance
Minister Masajyuro Shiokawa's comments earlier today.
Shiokawa said intervention remains an option for the government if
the weakening of the dollar/yen market accelerates.
"Overseas, some people are speculating that the MoF will step in at
around 118.50 level," he said.
"But, due to the economic slowdown, the US cannot keep its strong
dollar policy anymore. If you consider this, it is pretty unclear
whether Japan's MoF can (actually intervene)," Ookawara said.
Ookawara said that current trend of a weak dollar against the yen
will continue, adding that the dollar/yen will move in the range of
115.00-120.00 level next week.
He said that Tokyo trade next Monday will become very thin, due to
a US holiday on that day, adding that even minor news could have a
major impact on the forex market here.
The euro was little changed after initially gaining after the
expected 25 point basis rate cut by the European Central Bank, dealers
said.
Ookawara said the rate cut was positive to the euro, adding that
the euro is expected to reach the 0.9300 level against the dollar.
"In addition, the euro will be well supported by the falling
dollar," he said.
However, investors are still skeptical whether a further rate cut
by the ECB could be carried out without difficulty.
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