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Dollar moves tightly around ¥82.36

JIJI

The dollar traded in a narrow range in Tokyo trading Monday, with investors waiting for a monetary policy decision by the U.S. Federal Reserve later this week.

At 5 p.m., the dollar stood at ¥82.36-37, virtually unchanged from ¥82.36-36 at the same time Friday. The euro was at $1.2892-2897, down from $1.2936-2937, and at ¥106.20-23, down from ¥106.54-61.

In early trading, the dollar attracted buying and rose to around ¥82.60 at one point following its solid performance late last week that reflected better than expected U.S. employment data for November. U.S. nonfarm payrolls increased 146,000 from a month before after seasonal adjustment, against a revised rise of 138,000 in October, the Department of Labor reported Friday.

But the dollar came under selling pressure after the release on Monday morning of Japan’s international balance of payments data for October. The Finance Ministry said the current account surplus stood at ¥376.9 billion, better than a median forecast of ¥233.3 billion among economic research institutes polled by Jiji Press.

“Japan’s current account surplus figure was not as bad as expected,” Hiroshi Yanagisawa, chief analysis at FX Prime Corp., said.

After the data release, the yen attracted moderate buybacks, an official at a foreign exchange trading service firm said.

The dollar was also hit selling by Japanese exporters, brokers said.

In the afternoon, the dollar was pressured by position adjustment selling ahead of the Fed’s closely watched Federal Open Market Committee meeting on Tuesday and Wednesday, brokers said.

With the Fed expected to launch further monetary easing at the meeting, market players are likely to cover yen-short positions, an official at a foreign financial institution said, suggesting that the dollar’s topside will be capped for now. Meanwhile, the euro was weaker against the dollar and the yen.

While the weekend announcement that Italian Prime Minister Mario Monti will resign did not have a major impact on the foreign exchange market, the euro’s downside risks have grown, an analyst at a Japanese bank said.