The dollar advanced in Tokyo Tuesday, December 12, on investors' expectations that the US Supreme Court will hand victory to George W. Bush in the US presidential election, dealers said.
The greenback traded at 111.20-23 yen at 5:00 pm (0800 GMT), well up from 110.67 yen in New York and 110.93-96 yen in Tokyo late Monday.
The euro bought $0.8793-96, up from $0.8773 in New York but down sharply from $0.8855-58 in Tokyo late Monday.
"Even though the decision was postponed, investors firmly expect that Bush will win the US presidential election," Sanwa Bank dealer Mitsuru Sahara said.
The US Supreme Court held a momentous hearing on Monday that could finally scupper Democrat Al Gore's presidential hopes, but the nine justices were not expected to issue their ruling until Tuesday at the earliest.
They were deciding whether or not to allow manual recounts of Florida's disputed presidential ballots, which Gore says would give him victory.
A tax-cutting administration under Republican Bush is seen as more market-friendly than a Gore presidency.
"Investors bought the dollar, based on their expectations that Bush will win," said Asahi bank dealer Nobuyuki Maenaka.
"If Gore wins, the impact on the currency market will be big. The euro will rise to the middle of the 89-cent level, and the yen will rise by 0.5-0.6 yen against the dollar," Maenaka forecast.
Bank of Tokyo-Mitsubishi dealer Takeshi Iba agreed. "If Gore admits defeat, the dollar will be bought," he said.
The currency market was unfazed by new opinion polls in Japanese newspapers which underlined scant support for Prime Minister Yoshiro Mori, he said.
"Everyone already knows that his support rate is low," Iba said.
A nationwide survey by the Mainichi Shimbun found the approval rating for Mori's cabinet, which was reshuffled last week, declined to 15 percent in December with an overwhelming majority calling for Mori's resignation.
The euro's fall through $0.88 was unsurprising, said a currency dealer at BNP Paribas in Singapore.
"There is still some consolidation (for the euro) after last night's sell-off in New York and London," he said.
"The market has been waiting too long for the (US) result," he added. "I don't expect much of an impact."
Against the yen, the euro bought 97.76, up from 97.11 in New York but down from 98.24 in Tokyo Monday afternoon.— (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)