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Greenback rallies past ¥98.50 level

JIJI

The dollar rallied above ¥98.50 in Tokyo trading Thursday partly on the back of solid Chinese manufacturing data and stock price rises.

At 5 p.m., the dollar stood at ¥98.60-60, up from ¥97.84-85 at the same time Wednesday. The euro was at $1.3235-3237, against $1.3279-3282, and at ¥130.50-52, up from ¥129.93-96.

The greenback gathered upward momentum as the Nikkei 225 average surged following a report that China’s manufacturing Purchasing Managers’ Index for July rose 0.2 point from the previous month to 50.3 to stay above the boom-or-bust dividing line of 50.

The U.S. currency accelerated its upswing in late trading on buying from European traders.

In early trading, the dollar was on a soft note below ¥98 on receding expectations that the U.S. Federal Reserve will soon scale back its quantitative easing policy.

The Federal Open Market Committee, the policy-setting arm of the U.S. central bank, said in a statement after its two-day meeting through Wednesday that it “reaffirmed” its willingness to keep the policy rate target near zero for a “considerable time” after ending asset purchases. It also lowered its assessment of the pace of the U.S. economic recovery to “modest” from “moderate.”

An analyst at a bank-affiliated securities firm said that “the market consensus remains that the Fed is on track to begin in September to scale back its asset purchase program.”

Market players shifted focus to monetary policy decisions to be announced by the European Central Bank and the Bank of England later Thursday and the U.S. government’s July employment report due out Friday.