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Cypriot woes drive dollar lower

JIJI

The dollar sagged below ¥94.20 in Tokyo trading Thursday, pulled down by concerns over European sovereign debt problems before Cypriot banks reopened later in the day following a eurozone bailout deal.

At 5 p.m., the dollar stood at ¥94.18-20, off from ¥94.70-72 at the same time Wednesday. The euro was at $1.2786-2792, down from $1.2823-2825, and at ¥120.46-47, down from ¥121.46-47.

The dollar remained weak against the yen after falling in line with the euro’s plunge versus the yen overseas overnight.

Worries grew in the market about possible upheaval in Cyprus, such as an outflow of money from banks in the Mediterranean island nation that were scheduled to resume operations later Thursday for the first time in 13 days.

“As financial market participants are jittery, the problems of Cyprus tend to stimulate euro selling,” said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp.

Speculation about a credit-rating agency’s possible downgrading of Italian sovereign debt also weighed on the single European currency.

After trading around ¥94.30 in early Tokyo trading, the dollar gradually headed lower to around ¥94, hit by selling from Japanese exporters before Japan’s fiscal 2012 ends this month, said an official of a major Japanese bank.

Weakness in Chinese and other Asian stock markets prompted investors to snap up the yen.

Bank of Japan Gov. Haruhiko Kuroda reiterated readiness to implement aggressive monetary easing at a Diet committee meeting Thursday morning. But his comments “offered nothing new and failed to buoy the dollar versus the yen,” said an analyst at another Japanese bank.