The yen rose against the dollar in Tokyo Tuesday, March 6, as investors bought back the currency following a rebound in Japanese stock prices, dealers said. The yen traded at 118.68-71 to the dollar at 2:00 pm (0500 GMT), up from 119.04 yen in New York and 119.00-03 yen in Tokyo late Monday.
"Investors bought the yen as share prices rose," said Toyo Trust and Banking dealer Kenichi Ishiwaki. Share prices in Tokyo rose 1.8 percent Tuesday morning with the Tokyo Stock Exchange's Nikkei-225 index gaining 216.47 points to 12,538.63. "Miyazawa's remarks indirectly caused the dollar to fall against the yen," Ishiwaki said.
Japanese Finance Minister Kiichi Miyazawa said Tuesday he was "watching closely" the current movements in the dollar, although he declined to say whether he was concerned about its rise to close to 120 yen. "I have nothing to say about the current dollar-yen moves," he said. The trend was still for the Japanese currency to be sold off in the short term, dealers said. "Share prices, interest rates are low, and investors are uncertain over the Japanese political turmoil as to whether Mori will resign or not," Fuji Bank's dealer Hideyuki Tsukamoto pointed out.
Japanese Prime Minister Yoshiro Mori vowed Tuesday to hang on to power following the defeat of a potentially humiliating no-confidence motion against his cabinet the previous day. "There was no lead to buy the yen," Tsukamoto said. "When we talk about Japanese economic management, we can't help being pessimistic about it," he said, adding the dollar-yen rate would easily react to negative leads from the world's second largest economy.
The European single unit was meanwhile quoted at $0.9275 around 2:00 pm, down from $0.9300 in New York and $0.9327-30 in Tokyo Monday afternoon. Against the yen, the euro bought 110.11, down from 110.68 in New York and 110.94 in Tokyo late Monday.
"Investors sold the euro and bought the dollar as US stock prices rose, and for profit-taking," Toyo Trust and Banking's Ishiwaki said, adding the euro was sold also against the yen for profit-taking.
US stocks ended higher Monday, with the high-tech Nasdaq index gaining 1.24 percent to close at 2,143.97 points, and the Dow Jones up 0.89 percent, to close at 10,559.62 points. European Central Bank president Wim Duisenberg said in Brussels Monday he was aware that US interest rates had fallen below the level of those in the euro zone. But the ECB would not be hurried into making a move, he said. "For the time being it will remain that way ... the ECB is awaiting signals before another move." —(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)