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TSE rise helps dollar past ¥99.50

JIJI

The dollar rose above ¥99.50 in Tokyo trading Monday, helped chiefly by further gains in Tokyo stock prices.

At 5 p.m. the dollar stood at ¥99.59-61, up from ¥98.81-84 at the same time Friday. The euro was at $1.3046-3047, almost unchanged from $1.3045-3047, and at ¥129.93-130.00, up from ¥128.93-96.

The dollar carried over its solid tone from overseas trading last week, when investors became less risk-averse after sharp rises in Japanese and Chinese stock prices.

The dollar briefly topped ¥99.50 after the release early in the morning of the Bank of Japan’s “tankan” quarterly business sentiment survey.

The BOJ survey showed that the closely watched diffusion index for large manufacturers’ current business conditions stood at plus 4, the first positive figure in the seven quarters.

But the dollar failed to attracted further purchases as readings in the survey almost matched market forecasts, brokers said.

“Dollar selling by Japanese exporters was strong,” a major Japanese bank official said.

“Due to selling by exporters and profit-taking by speculative players, the pace of the dollar’s rise turned out to be moderate,” an official at a foreign exchange broker said.

The dollar attracted renewed demand in the afternoon as Tokyo stocks turned higher. After European investors joined trading in late hours, the dollar rose to levels around ¥99.70.

With the dollar having hit a one-month high above ¥99 in Tokyo, “the dollar lacks additional positive factors and energy to chase higher ground,” an official at a foreign exchange margin trading service firm said.

A think tank official said investors appear to be taking a cautious stance before the release of a series of closely watched U.S. economic data, including the government’s jobs report for June, due out Friday.

The dollar is expected to show nervous movements mostly at levels above ¥99 for the time being, with market players keeping cautious eyes on the key threshold of ¥100, the official added.

“It would take some time for the dollar to rise above ¥100 as the currency is expected to face greater selling by exporters,” a foreign exchange analyst said.