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Greenback bounces back to ¥99.50

JIJI

The dollar firmed at around ¥99.50 in Tokyo late Wednesday as dollar purchases were spurred by higher stock prices in and outside Japan, as well as brisk U.S. economic data.

At 5 p.m., the dollar was quoted at ¥99.50-50, up from ¥98.63-67 at the same time Tuesday. The euro stood at $1.2991-2994, up from $1.2988-2989, and at ¥129.25-29, up from ¥128.13-16.

In overnight trading abroad, the dollar gained versus the yen on higher equity prices in the United States and elsewhere and stronger-than-expected U.S. home prices for February, traders said.

The firmness continued into Tokyo trading, sending the greenback to around ¥99.80 early in the day. The rise in Tokyo stock prices provided additional support to the dollar, they said.

The greenback later swung between around ¥99.20 and ¥99.70 before standing around ¥99.50 in late trading. The dollar again failed to hit ¥100, a level it has not exceeded in the last four years.

“Massive options-linked sell orders, mainly from overseas players, are lined up just under the threshold,” a currency market strategist said.

Market sources also noted the U.S. unit faces selling by Japanese exporters and that some players are moving to unwind dollar-long positions.

The dollar is likely to test ¥100 again, but the threshold will not be cleared at least for the time being, the sources said.

Developments scheduled for later Wednesday that could affect exchange rates included the release of U.S. durable goods orders for March and a speech by European Central Bank Vice President Vitor Constancio to the European Parliament.