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Dollar moves tightly below ¥93.50

JIJI

The dollar moved in a narrow range below ¥93.50 in Tokyo trading Wednesday, as investors awaited upcoming overseas economic events amid a lack of fresh domestic trading pegs.

At 5 p.m., the U.S. currency stood at ¥93.28-30, up from ¥93.16-17 at the same time Tuesday. The euro was at $1.3050-3052, up from $1.3046-3048, and at ¥121.74-75, up from ¥121.56-57.

The dollar was slightly higher above ¥93 in early trading, carrying over its solid tone from overnight trading overseas, where the greenback attracted demand thanks to higher stock prices on Wall Street and favorable readings in U.S. economic data, including the Institute for Supply Management’s nonmanufacturing activity index for February.

Although Tokyo stocks surged after the Dow Jones industrial average hit an all-time closing high Tuesday, the dollar failed to extend gains and came under selling pressure, market sources said.

“The greenback was weighed down by remarks from U.S. Treasury Undersecretary (Lael) Brainard”, Hiroshi Higa of Money Square Japan Inc. said.

In a speech Tuesday, Brainard warned against calls for the Bank of Japan to purchase foreign bonds, saying that Group of Seven members have been “clear in ruling out the pursuit of macroeconomic accommodation through the purchase of foreign assets.”

Meanwhile, an official at a major domestic bank said, “the dollar appeared to be pressured by selling related to repatriation moves by Japanese companies before the (March 31) fiscal yearend.”

Though the dollar recouped some of its early losses, its upward momentum proved short-lived. However, after European players started trading in late hours, it drew renewed demand amid the euro’s rise, market sources said.