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Dollar climbs past ¥97.50 level

JIJI

The dollar rose above ¥97.50 in Tokyo trading Monday as a risk-averse mood receded somewhat thanks to a jump in Japanese equity prices.

At 5 p.m., the dollar stood at ¥97.57-58, up from ¥97.01-05 at the same time Friday. The euro was at $1.3810-3810, down from $1.3824-3826, and at ¥134.75-82, up from ¥134.10-16.

In early morning trading, the dollar rose above ¥97.50 despite the lack of particular trading incentives, market sources said.

“The dollar extended gains apparently due to stop-loss buy orders lined up at levels around ¥97.50-60,” an official at a foreign exchange margin trading service firm said.

After staying around ¥97.60, the dollar came under selling pressure to lock in profits and fell below ¥97.50 as Tokyo stocks gave up early gains, the sources said. But the dollar bounced back quickly, thanks to purchases by Japanese importers for settlement purposes.

In the afternoon, the dollar was solid above ¥97.50 after Tokyo stocks extended their gains.

“Other than stock price moves, there were no trading incentives unique to the dollar-yen pair,” an official at a foreign-exchange broker said.

“Dollar-yen trading is expected to lack a clear direction for the time being,” a major Japanese bank official said.

Investors are now waiting for the U.S. Federal Reserve’s policy-setting Federal Open Market Committee meeting Tuesday and Wednesday. With the Fed widely expected to maintain its current monetary policy, market participants will be paying attention to the statement to be issued after the meeting.

“Whether the statement is dovish or hawkish will be closely watched as a clue to the Fed’s policy intentions,” an official at a major forex dealer said.

Because the recent U.S. government shutdown is expected to have a significant effect on the U.S. economy, the Fed statement will probably take a relatively cautious view on the economy, one market source said.

“The dollar is unlikely to gain ground against the yen before the economic impact of the U.S. government shutdown is analyzed with forthcoming economic data or FOMC minutes, said an official of a foreign bank.