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Dollar falls on sluggish offshore data

JIJI

The dollar fell below ¥99 in Tokyo on Tuesday, dampened by sales that stemmed from sluggish economic indicators in the United States and China.

At 5 p.m., the dollar was quoted at ¥98.63-67, down from ¥99.69-70 at the same time Monday. The euro stood at $1.2988-2989, down from $1.3037-3041, and at ¥128.13-16, down from ¥129.97-99.

“In the absence of fresh dollar-buying factors, it may take some time for the dollar to resume its attempt to test ¥100,” said an analyst at a bank-linked brokerage house.

In overnight trading abroad, the dollar hovered just below ¥100 until the news of disappointing U.S. existing home sales for March came in, which pushed the U.S. currency down to around ¥99, traders said.

The dollar inherited the weakness in early Tokyo trading, moving narrowly around ¥99, according to them.

The greenback added losses later on weakness of a China manufacturing purchasing managers’ index for March, falling around ¥98.50 temporarily, traders said.

“Those who had built up dollar long positions in anticipation of the currency’s rise above ¥100 wound up their positions in disappointment,” a major Japanese bank official said.

Another negative factor was Nippon Life Insurance Co.’s investment policy for fiscal 2013, announced Monday. The firm’s policy was taken to indicate the industry’s cautious stance toward investment in unhedged foreign bonds, a brokerage official said.

Some players bought back dollars in the afternoon, but the currency remained under adjustment sales and was too feeble to stage a clear rebound, another official said.