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Profit-taking a drag on surging dollar

JIJI

The dollar fell below ¥101.50 in Tokyo Tuesday, pulled down by profit-taking and adjustment sales after its recent bull run.

At 5 p.m., the dollar was quoted at ¥101.37-38, down from ¥101.62-62 at the same time on Monday. The euro was at $1.3000-3000, up from $1.2961-2963, and at ¥131.79-80, up from ¥131.74-75.

Dollar sales intensified after the currency topped ¥102 Monday, traders said.

“Market players focusing on short-term gains took profit as the dollar reached ¥102 quickly after crossing the ¥100 line” on Thursday, a dealer said.

An official at a foreign brokerage house said many participants feel the dollar needs some time to cool off after the latest buying binge.

A fall in Japanese and Chinese stock prices and a rise in Japanese long-term interest rates also helped push down the U.S. currency versus the yen, traders said.

The 225-issue Nikkei stock average closed lower after a firm opening, while the key 10-year Japanese government bond yield temporarily rose to the highest level since August 2012.

Some market players are worried about recent comments by Japanese business leaders and government policymakers, who are becoming vocal to express their hope for stable foreign exchange rates, said an official of a margin trading service firm.

Among them, economic and fiscal policy minister Akira Amari told reporters Monday that the yen’s excessive drop, as well as its excessive rise, is bad for the Japanese economy.

Those remarks were taken as a warning against the yen’s excessive weakness, which spurred dollar sales, market sources said.

But the dollar drew purchases at lows, the sources added.