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Dollar weakens below ¥96 line

JIJI

The dollar fell below ¥96 in Tokyo Wednesday, as profit-taking intensified after the recent bull run.

At 5 p.m., the dollar was at ¥95.47-49, down from ¥96.39-41 at the same time Tuesday. The euro was at $1.3061-3063, up from $1.3004-3006, and at ¥124.71-73, down from ¥125.36-38.

No major market-moving factors were seen in the foreign exchange market for now after the Diet’s hearings for the three nominees for the Bank of Japan’s new leaders ended Tuesday.

“Many players have grown tired of buying dollars for yen” following their recent buying binge, an official at a foreign-affiliated bank said.

Short positions on the yen that had been built up on speculation of additional monetary easing measures are being wound up, an official at a major Japanese bank said.

An official at a different Japanese bank said foreign investment funds seem to be liquidating some of their yen-short positions after seeing some Japanese opposition parties decided to reject the BOJ nominees, including Asian Development Bank President Haruhiko Kuroda, who is tapped to become the next governor of the BOJ.

Despite opposition from some parties, all three nominees are expected to be confirmed by the Diet. The trio will take office March 20, the day after the current leadership team led by Gov. Masaaki Shirakawa leaves.

The dollar received some underpinnings from buying on dips, purchases from importers and expectations of bold monetary easing steps under the new BOJ leadership, traders said.

But the greenback accelerated its downswing in late trading in tandem with falls in equity prices in Japan and other Asian economies, the traders said.