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Dollar slightly lower against yen in Asian trading

Dollar slightly lower against yen in Asian trading

The U.S. dollar fell slightly against the yen in Asian trading Friday on mild profit taking in reaction to recent gains.
The U.S. dollar bought 118.81 yen at mid-afternoon in Tokyo, down from 118.93 yen late Thursday in New York. The euro rose to US$1.3170 from US$1.3146 late Thursday.
Shinichiro Kanehira, senior vice president at Mizuho Corporate Bank Ltd., said players sold the dollar to lock in profits following the currency's recent advance.
Short-term speculators refrained from taking fresh positions in a thin market on the last trading day of 2006.
But Tokyo dealers said the yen could fall further against the American currency next year, weighed down by uncertainty over whether the Bank of Japan will raise interest rates in January as well as expectations that the U.S. Federal Reserve won't start cutting rates any time soon.
"The dollar may climb a little above 120 yen at the beginning of next year, when a lot of players rush to take new positions," said Tsutomu Soma, senior dealer at Okasan Securities.
Soma said start-of-the-year flows _ which tend to be large and, this time, will likely be dominated by yen sellers _ are expected to lift the dollar above the walls of Japanese exporters' sell-orders and options-related selling orders rumored to be between 119.00 yen and 120.00 yen.
During Tokyo hours, the dollar rose a fifth of a yen to its session high of 119.05 yen on the EBS dealing system.
But rising further above 120.00 yen _ such as up to 121.00 yen _ will be a tough job for the U.S. currency, other traders said.
Masaki Fukui, a senior market economist at Mizuho Corporate Bank, said if the dollar clears 120 yen and continues upward, U.S. and European industries are likely to increase pressure to fight the weak yen, making traders wary of pushing the dollar higher.
Other traders were on guard against the dollar's downside risks. If the market's attempts to take the currency above 120.00 yen fail at the start of the year, disappointed players are likely to sell the U.S. currency to pocket quick profits, traders said.
Against other Asian currencies, the dollar was mixed, rising to 929.5 South Korean won from 929.4 the previous day. It fell to 49.03 Philippine pesos from 49.16.


Updated : 2021-04-13 14:44 GMT+08:00