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Dollar drops to a one-month low

JIJI

The dollar fell below ¥93 for the first time in about a month in Tokyo on Tuesday, following a disappointing U.S. economic indicator released overnight.

At 5 p.m., the dollar was at ¥92.85-87, down from ¥93.42-44 at the same time Monday. The euro stood at $1.2854-2856, up from $1.2813-2815, and at ¥119.37-40, down from ¥119.71-74.

The U.S. Institute for Supply Management reported Monday that its closely followed manufacturing sector index fell to 51.3 in March from 54.2 in February, down for the first time in four months.

The bleak reading pushed down U.S. long-term interest rates and prompted dollar sales for yen in overseas trading. The dollar’s weakness continued into Tokyo trading, traders said.

The greenback accelerated its drop in the afternoon on large-lot sales from some investors, a major Japanese bank official said. Also hit by stop-loss selling, the dollar fell to levels around ¥92.60 briefly.

Pointing out that the U.S. currency rose more than 25 percent against the yen between September and March, a bank-affiliated brokerage official said, “Moves to take profit grew ahead of the Bank of Japan’s monetary policy meeting” that starts Wednesday.

The dollar-yen pair reacted little to remarks by BOJ Gov. Haruhiko Kuroda in the Diet on Tuesday.

Kuroda reiterated his resolve to achieve the BOJ’s 2 percent inflation target through bold monetary easing measures, but he said nothing new, an official at a foreign exchange margin trading service noted.

The dollar recouped some of its loss in late trading, but its topside was heavy due to the weakness of the Tokyo stock market, traders said.