The dollar edged down against the yen Wednesday, November 22, in Tokyo from overnight highs in New York, as investors took profits ahead of a holiday in the United States and Japan.
But despite the overnight ease, the dollar was still trading around its nine-month highs against the yen, dealers said.
The greenback traded at 110.08-10 yen at 2:00 pm (0500 GMT), against 110.10 yen in New York, but up from 109.87-90 yen in Tokyo late Tuesday.
Wednesday's levels were not far off those reached on February 29 this year, when the dollar hit 110.25 yen in Tokyo.
"Investors sold the dollar for profit-taking. Tomorrow (Thursday) will be a holiday both in Tokyo and in New York," said Sanwa Bank dealer Mitsuru Sahara.
"Although mainly US investors had bought the dollar, the immediate Japanese political crisis was settled more quickly than originally thought."
Japan's gaffe-prone Prime Minister Yoshiro Mori survived a no-confidence vote early Tuesday but his days ahead will be anything but easy with latest polls showing public support falling to a new low.
The yen was still under selling pressure against the dollar as investors remain cautious amid Japan's uncertain medium-term political outcome, according to dealers.
"Japanese politics cast a shadow of uncertainty on investors' minds," said Bank of Tokyo-Mitsubishi dealer Kiyoshi Kuzuhara.
"As the no-confidence motion (for Mori) had been rejected, investors feared that the reform within the ruling Liberal Democratic Party might be delayed."
Meanwhile, Sahara added that if the Nikkei stock index dived below the 14,000 yen level, investors' sentiments toward the Japanese economy may worsen.
The euro meanwhile traded at $0.8476 around 2:00 pm, up from $0.8432 in New York, but down from $0.8520-23 in Tokyo late Tuesday.
Investors bought the euro as they were wary that the ECB (European Central Bank) might intervene unilaterally tomorrow, when Tokyo and New York will be on holiday and the market will be thin so the “intervention will be more effective," Sanwa's Sahara said.
Bank of Tokyo-Mitsubishi's Kuzuhara agreed.
"Investors somehow expect the intervention, and as more investors bought the euro, the euro will naturally rise," Kuzuhara said.
Against the yen, the euro bought 93.29, against 92.86 in New York, but down from 93.64 in Tokyo Tuesday afternoon.
Japanese markets will be closed Thursday for Labor Thanksgiving Day.— (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
