Dollar rises against yen in Tokyo

Published December 5th, 2000 - 02:00 GMT

The dollar rose against the yen in Asian trade Tuesday, December 5, as investors adopted a cautious stance ahead of Prime Minister Yoshiro Mori's cabinet reshuffle due later in the day, dealers said. 

 

The dollar traded at 111.05-09 yen at 2:00 pm (0500 GMT) in Tokyo Tuesday, up from 110.94 yen in New York and 111.02-05 yen in Tokyo late Monday. 

 

"Investors detected a smell in the air that Japan's political world may take a backward step after the reshuffle," said Fuji Bank dealer Hideyuki Tsukamoto. 

 

"There are strong expectations that the new cabinet will be an unpopular and short-lived one," the dealer said. 

 

Japan's ministers resigned en masse ahead of the reshuffle to be announced by Prime Minister Yoshiro Mori later in the day. 

 

In the move slated to bring cabinet portfolios into line with January's consolidation of government ministries, Mori is expected to retain his key Finance Minister Kiichi Miyazawa and Foreign Minister Yohei Kono. 

 

But many view the the new cabinet as a temporary stopgap measure until upper house elections next July, Tsukamoto added. 

 

"The launch of the new cabinet surely does not create a yen-buying factor, but as a lead, it is too weak to boost the dollar further," Tsukamoto said. 

 

The euro, meanwhile, was quoted at $0.8874, down slightly from $0.8886 in New York, but up from $0.8772-75 in Tokyo late Monday. 

 

The euro's slight fall was due to profit-taking after the currency rose on the back of growing concerns over the US economy, the dealer added. 

 

"The euro continues to make headway amid persistent uncertainty about the US economy's growth potential," research house IDEAglobal in Singapore said in a report. 

 

"As the market seeks to establish a base, expect the unit to find some support around the $0.8800 region, (while) $0.9020 remains a key resistance level being the September 22 intervention high," it said. 

 

Against the yen, the euro was quoted at 98.58 in Tokyo, compared with 97.40 yen in Tokyo late Monday.—(AFP)  

 

© Agence France Presse 2000  

© 2000 Mena Report (www.menareport.com)

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