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Dollar drifts narrowly below ¥99

JIJI

The dollar drifted narrowly below ¥99 in Tokyo trading Thursday due to a continued lack of fresh trading incentives, while the euro was buoyed by upbeat German production data.

At 5 p.m., the dollar stood at ¥98.82-84, little changed from ¥98.83-85 at the same time Wednesday. The euro was at $1.3167-3168, up from $1.3094-3096, and at ¥130.13-15, up from ¥129.41-43.

The greenback briefly weakened in the afternoon as the major Tokyo stock indexes gave up early gains and ended in minus territory, hit by selling to lock in profits.

The euro was encouraged by data the previous day that Germany’s industrial output in March unexpectedly rose, by 1.2 percent from last month.

A rate cut by South Korea’s central bank invited some buying of the yen, as the Bank of Korea cited the yen’s downtrend as a factor behind its weak outlook on the South Korean economy, an official of a forex brokerage said.

Meanwhile, the dollar-yen sector was little affected by data that China’s consumer price index rose 2.4 percent from a year earlier in April, well below the Chinese government’s target for maximum annual growth of around 3.5 percent, and that the Australian economy added 50,100 jobs in the month, beating market expectations for 11,000 jobs.

“Dollar purchases ran their course with the dollar’s sharp rise after upbeat U.S. jobs data released late last week, and it’s now difficult to trade actively,” an official at a major Japanese bank said.

“Additional impressive U.S. economic data will be necessary for the dollar-yen pair to break the stalemate, but such data are not expected this week,” the bank official said.