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Dollar tops ¥99.70 on Aso remark

JIJI

The dollar was firmer above ¥99.70 in Tokyo trading Thursday, supported by a rise in Japanese stock prices and a dollar-positive comment by Finance Minister Taro Aso.

At 5 p.m., the dollar was quoted at ¥99.74-78, up from ¥99.56-58 at the same time Wednesday. The euro stood at $1.3455-3457, up from $1.3429-3431, and at ¥134.21-24, up from ¥133.72-77.

Early in the morning, the dollar fell to around ¥99.20 after a dovish comment by Janet Yellen, the nominee to replace U.S. Federal Reserve Chairman Ben Bernanke, traders said.

The U.S. unemployment rate “is still too high,” she said in the prepared text of her statement to be delivered at a confirmation hearing by the Senate Banking Committee later Thursday.

She also said the Fed “has more work to do” toward a U.S. economic recovery, the text said.

These comments “have given us the impression that she is cautious” about a reduction in the Fed’s bond purchases, a stance that is negative for the dollar, a major Japanese bank official said.

But the dollar rose back above ¥99.50 by noon as Japanese stock prices expanded their gains, traders said.

In the afternoon, the greenback climbed further above ¥99.70 after Finance Minister Taro Aso said Japan needs to always be prepared to launch currency market intervention, traders added.

“The unexpected surge in stock prices pushed up the dollar versus the yen, but at levels above ¥99.50, massive profit-taking on the dollar is waiting,” a currency market broker said.

Yellen’s confirmation hearing is likely to weaken speculation that the Fed may start scaling down the bond purchase program in December, market sources said.