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Dollar drifts lower below ¥93.40

JIJI

The dollar eased slightly below ¥93.40 in Tokyo on Wednesday after Prime Minister Shinzo Abe has grown cautious about proposed purchases of foreign bonds.

At 5 p.m., the dollar was quoted at ¥93.35-36, down from ¥93.46-46 at the same time Tuesday. The euro stood at $1.3408-3409, up from $1.3336-3340, and at ¥125.16-19, up from ¥124.62-65.

Speaking before the Upper House Budget Committee in the afternoon, Abe said it has become “almost unnecessary” to set up a proposed public-private fund to buy foreign bonds.

“Even though the dollar stays on an uptrend against the yen, it may experience deeper adjustments if it comes under sales repeatedly on remarks deemed negative by market players,” an official at a major Japanese bank said.

Early in the morning, the greenback rose to around ¥93.80 on purchases to take advantage of anticipated strong demand for dollars for commercial settlements, traders said.

Dollar purchases gained some more momentum after the announcement of a record monthly trade deficit by Japan also in the morning, they said.

The nation posted a customs-cleared trade deficit of ¥1.63 trillion for January, the biggest ever monthly deficit, the Finance Ministry said. The result was weaker than the market’s forecast.

But the impact of the trade data was not strong on Tokyo trading, traders said, noting to a strong wait-and-see mood ahead of upcoming major events.

Abe will visit the U.S. Thursday for a meeting with President Barack Obama. The government’s picks for Bank of Japan governor and deputy governors are imminent, and the U.S. Federal Reserve was to release later Tuesday the minutes of its policy meeting on Jan. 29 and 30.