Forex: Dollar Up Vs Yen With Support From Mark
TOKYO (Dow Jones)-Japanese and overseas investors were aggressive buyers of the Deutsche mark against the yen in Tokyo Friday, helping to buoy the dollar versus the yen in the process.
The dollar fell against the mark as traders flocked the German currency as a safe haven amid concerns about the financial systems in both the U.S. and Japan.
Although the dollar started Friday's Asian session at levels a little lower against the yen compared with levels late Thursday in New York, a buying binge of the mark versus the yen by U.S. and Japanese institutional investors, which involves dollar-yen buying in the process, soon underpinned the dollar, putting it back above 135.00 yen, dealers said.
"Right now, mark-denominated assets provide the best investment opportunity," said Tetsu Aikawa, a senior trader at Sanwa Bank. "It is the only currency whose interest rates are unlikely to go down among the three major currencies (of the U.S., Japan and Germany)."
Worries about the U.S. financial system following the sudden bailout earlier this week of major U.S. hedge fund Long-Term Capital Management, were cited for the dollar's initial weakness, while the ongoing stalemate in Japan between the opposition and ruling camps over banking reform bills continues to cast a cloud over the yen.
A large drop in Japanese stock prices also hurt the yen, traders said. The benchmark Nikkei stock average closed the session 481.94 points lower at 13,723.84.
"U.S. investors are pulling money out of Japanese stocks and instead have begun investing the money into European securities and assets," said Shuji Takano, assistant manager of foreign exchange at ABN Amro Bank.
Around 0530 GMT (1:30 a.m. EDT), the dollar is quoted at 135.25 yen, above 134.93 yen late Thursday in New York and up from 135.08 yen late Thursday in London.
The U.S. currency also is at DEM1.6727, lower than DEM1.6740 late Thursday in New York and below DEM1.6771 in London Thursday.
nikkei.co.jp |
