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Dollar climbs back above ¥88.50

JIJI

The dollar rose above ¥88.50 in late Tokyo trading Thursday, helped by buybacks amid the lack of clear direction ahead of the Bank of Japan’s policy meeting next week.

At 5 p.m., the dollar was quoted at ¥88.60-60, up from ¥88.09-11 at the same time Wednesday. The euro was at $1.3291-3292, up from $1.3279-3279, and at ¥117.75-77, up from ¥116.98-117.00.

After rising close to ¥88.80 in early trading, the dollar fell back to around ¥88.10 at one point as speculators who bought the greenback earlier moved to take profits.

Risk aversion increased due to a fall in the Australian dollar following the country’s disappointing employment data for December as well as weakness of Asian stock markets.

“Investors are expected to lock in profits in the run-up to the weekend as the U.S. market is closed Monday for Martin Luther King Jr. Day,” said an official from a major foreign bank.

The U.S. unit was pulled down in part by speculation about the BOJ’s two-day Policy Board meeting, which starts Monday.

“As nothing more than what has already been reported is likely to come out of the meeting, its outcome may dash hopes for the monetary policy of Prime Minister Shinzo Abe’s administration,” said an official of a foreign exchange margin trading service firm.

The dollar showed resilience against the yen in the afternoon as the Nikkei 225 average pared its earlier losses.

“The market lacks a clear direction” ahead of the three-day weekend in the United States and the BOJ’s policy meeting, said an official of a major Japanese bank.