Dollar Rises to Two-Week High vs. Yen on Hope Japan Will Curb Bond
Yields
Dollar Rises vs Yen to 2-Wk High on Hope Japan to Curb Yields
Tokyo, Feb. 16 (Bloomberg) -- The dollar rose against the
yen to a two-week high on speculation Japan may be pressured to
act more to drive down bond yields and weaken the yen to revive
its economy.
Pushing up the dollar were comments by Eisuke Sakakibara,
Japan's vice finance minister for international affairs, who said
he welcomed a weaker yen after the Bank of Japan eased monetary
policy Friday.
''The dollar is heading toward 116.85 yen it touched on Jan.
28,'' said Takeshi Imamichi, a foreign exchange manager at
Industrial Bank of Japan Ltd.
The dollar was quoted at 116.33 yen, up from 115.71 yen in
late London trading yesterday. It earlier rose as high as 116.57
yen. The euro was quoted at $1.1235, up from $1.1223 in London.
The dollar's climb was accelerated because the currency
triggered automatic ''stop-loss'' orders at around 116.20 yen
that traders put in place to curb losses should the currency move
contrary to expectations, traders said.
Traders' eyes remain focused on Japanese government bonds.
In recent weeks, the yen has moved in tandem with the yield of
the benchmark No. 203 bond.
The yen, which had surged to a one-month high of 111.75 to
the dollar on Feb. 3, when the bond yield rose to a record 2.44
percent, plunged to 115.52 to the dollar Wednesday when the yield
came down to 2.0 percent.
Bonds
Japanese bonds today rose, pushing down yields, as the
government has decided to reduce the sales of 10-year bonds in
March to 1.4 trillion yen ($12.1 billion) from 1.8 trillion yen,
shifting 400 billion yen to two-year and six-year bonds, Nikkei
English News reported, citing Kyodo News.
''The dollar could top 117 yen,'' said Yasuji Yamanaka, a
foreign exchange manager at Nikko Trust & Banking Co.
Still, Japanese exporters are repatriating overseas profits
at the current level, which ''will prevent the dollar from rising
above 117 yen during the Tokyo trading hours,'' he added.
The dollar's move could be exacerbated because of thin
trading as several markets in Southeast Asia are closed for up to
three days this week to mark the beginning of the lunar new year.
In other trading, the dollar was quoted at 1.4229 Swiss
francs, down from 1.4234 Swiss francs late London trading
yesterday. The British pound was quoted at $1.6273, up from
$1.6263 in London.
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