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Dollar slides back below ¥88 line

JIJI

The dollar fell below ¥88 in Tokyo Monday, pressured by profit-taking by speculators and sales from Japanese exporters.

At 5 p.m., the dollar was quoted at ¥87.76-77, down from ¥88.07-08 at the same time on Friday. The euro was at $1.3033-3037, up from $1.3006-3009, and at ¥114.38-41, down from ¥114.56-59.

After rising to around ¥88.30 in earlier Oceanian trading, the dollar spent much of the morning in Tokyo above ¥88, bolstered by buying on dips reflecting a dollar-bullish view prevailing in the market, traders said.

But in the afternoon, dollar sellers took an upper hand, sending the currency below the ¥88 line, the traders said.

“Market players have grown wary following the (dollar’s) recent rapid rise,” a foreign exchange market broker said, noting an increase in profit-taking.

Japanese exporters also unloaded dollars to take advantage of the currency’s recent upward march, the broker added.

An official at a foreign-linked bank said a slide in Japanese stock prices and a drop in U.S. long-term interest rates also weighed on the dollar.

Players fear that they would lose an opportunity for locking in profit unless they adjust their trading positions now, ahead of key events, a market analyst said.

Japan is set to adopt an economic stimulus package Friday, while the Bank of Japan is scheduled to hold its next monetary policy meeting Jan. 21-22. Other upcoming events include the start of the Diet session and a Japan-U.S. summit.

Despite Monday’s market developments, however, many participants expect the yen to weaken further, an official at a foreign-linked financial institution said, adding that the dollar will draw buying on dips below ¥88.

An analyst at a major Japanese bank said many players anticipate that the dollar will reach ¥90 in the near future.

In New York trading Friday, the dollar staged wild swings following the announcement of U.S. jobs data for December, traders said.

The dollar hit a 29-month high of ¥88.48 before falling back to around ¥87.60. Late on Friday there, the U.S. currency changed hands slightly above ¥88.