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Greenback gains on yen amid North Korea tension

Greenback gains on yen amid North Korea tension

The U.S. dollar extended gains against the yen in Asian trade yesterday as participants reacted nervously to North Korea's threat to carry out a nuclear test, dealers said.
The U.S. dollar firmed to 118.05 yen in Tokyo afternoon trade, up from 117.91 late Tuesday in New York.
The euro slipped to US$1.2718 from US$1.2729 while edging up to 150.14 yen from 150.10.
Dealers in Tokyo were concerned by Pyongyang's statement late Tuesday that it planned to conduct a nuclear test at some point in the future, prompting some players to shift funds into safe-haven currencies, dealers said.
But market watchers said the Dow Jones Industrial Average's rise to a new record high and a sharp drop in crude oil prices were also partly behind the U.S. unit's advance.
"The news prompted traders to buy the dollar but the dollar has only gone up approximately twenty cents," said Hidenori Kato, head of foreign exchange sales at Societe Generale.
World leaders - in particular in neighboring Japan - reacted with alarm after North Korea threatened to carry out a nuclear test, warning of grave consequences for the poverty-stricken nation and for regional security. Participants were also squaring their positions ahead of a speech later yesterday by U.S. Federal Reserve Chairman Ben Bernanke on savings to the Economics Club of Washington, hoping for clues on the outlook for U.S. interest rates.
"I think the rhetoric (from Bernanke) will be very much in line with what we've seen," CMC senior foreign exchange dealer Robert Mulcahy said.
U.S. monthly payroll numbers will be closely watched tomorrow, especially after the employment component of the Institute of Supply Management survey on manufacturing activity released Monday showed a contraction.