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Dollar climbs back over ¥92.30

JIJI

The dollar firmed above ¥92 in Tokyo trading Thursday as market participants regained their risk appetite on the back of the upbeat stock market.

At 5 p.m., the dollar was quoted at ¥92.34-35, up from ¥91.83-83 at the same time Wednesday. The euro stood at $1.3141-3143, up from $1.3093-3095, and at ¥121.36-37, up from ¥120.23-25.

“Risk on” sentiment was revived in the currency market in overnight trading abroad after government securities auctions in Italy went smoothly and U.S. stocks forged ahead.

Such sentiment was also fueled by U.S. Federal Reserve Chairman Ben Bernanke’s congressional testimony Wednesday, in which he showed a positive stance toward continuing the Fed’s monetary easing, traders said.

The dollar briefly topped ¥92.60 in Tokyo morning trading, aided by Tokyo stocks’ surge and month-end purchases by Japanese importers.

The healthy demand in the Italian debt auctions helped diminish market players’ concerns over the course of Italy’s fiscal reconstruction, which had grown after the country’s general election earlier this week resulted in parliamentary gridlock, dealers said.

While the dollar’s downside was firmly supported versus the yen, there was no mood to push the dollar higher.

“The market is no longer in the stage of trading on ‘Abenomics,’ ” or Prime Minister Shinzo Abe’s economic policies aimed at overcoming persistent deflation, an official of a major Japanese bank said. “There are few fresh incentives to step up selling of the yen.”

Meanwhile, players were cautious about dollar buying ahead of mandatory spending cuts in the United States set to take effect Friday.