The euro edged up against the dollar and the yen in Tokyo Wednesday as investors prepared for possible joint intervention to prop up the currency during a meeting of finance ministers and central bankers, a dealer said.
The European single currency traded at $0.8377 around 2:00 pm (0500 GMT), up from $0.8358 in New York, but down from $0.8391 in Tokyo late Tuesday.
"Investors bought the euro as they are expecting intervention, possibly during the ongoing G20 meeting," Fuji Bank dealer Hideyuki Tsukamoto said.
The two-day meeting of finance ministers and central bankers of the Group of 20 industrial and emerging market nations began Tuesday in Montreal.
The meeting sidelined investors, a Singaporean bank said in a report.
"Market players are reluctant to further extend short positions ahead of the G20 meeting," the DBS Group Holdings said.
"The market expects some euro supportive statement from the G20."
The euro has since fallen back after it rallied on the back of joint central bank intervention in September.
"Both the current euro-dollar, and euro-yen levels are now lower than those before the previous intervention (to support the euro)," said the dealer.
On September 22, the ECB, the US Federal Reserve and the Bank of Japan intervened to support the euro, triggering an immediate sharp rise in the value of the euro in London trade to $0.8945.
"Investors thought it wouldn't be surprising if another intervention came at any time," Tsukamoto said, adding, however, the euro's recovery was basically still weak.
Against the yen, the euro traded at 90.46, up from 90.11 in New York, but down from 90.73 in Tokyo Tuesday afternoon.
The dollar meanwhile bought 107.98-108.00 yen at 2:00 pm, up from 107.81 yen in New York, but down from 108.11 yen in Tokyo late Tuesday.
"Although investors had expected the Nikkei (225 index) to rebound (today), the actual level was slightly weaker, which caused them to sell the yen, and to buy the dollar," Tsukamoto said.
Share prices in Tokyo edged lower Wednesday with the key Nikkei-225 index losing 153.24 points, or 1.0 percent, to close the morning session at 14,994.95.— (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)