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Greenback briefly dips below ¥97

JIJI

The dollar moved around ¥97.50 in late Tokyo trading Wednesday, cutting early losses traced to growing tensions over the Syrian situation.

At 5 p.m., the dollar was at ¥97.48-50, down from ¥97.81-85 at the same time Tuesday. The euro stood at $1.3379-3380, against $1.3376-3379, and at ¥130.43-45, compared with ¥130.87-94.

The dollar fell below ¥97 in early trading as risk-aversion among investors grew amid mounting expectations that the United States and its European allies look set to launch military intervention in Syria soon, traders said.

Concerns about the Syrian situation sparked selling of the greenback at a time when market players are already jittery over a host of dollar-negative factors, including an expected early start of unwinding of the U.S. Federal Reserve’s asset purchases, a Japanese bank official said.

At its lows, however, the greenback received support from Japanese importers, traders said.

Purchases from importers for month-end settlements are believed to have slightly outweighed selling by exporters, an official at a major Japanese bank said.

The dollar also drew buybacks because the Tokyo stock market recouped some of its losses in the afternoon, market sources said.

In a speech in Kyoto on Wednesday afternoon, Bank of Japan Deputy Gov. Kikuo Iwata said the yen will weaken if real interest rates drop, but the remark had no major impact on dollar-yen trading.

One of the market’s focuses is whether the Syrian crisis will drag on. Risk-aversion will continue and the dollar’s upside will be capped as long as the Syrian situation remains tense, a foreign exchange broker said.