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Dollar holds steady above ¥103

JIJI

The dollar remained above ¥103 in Tokyo trading Tuesday, supported by real demand-backed purchases and speculation over possible Japanese investment of pension money overseas.

At 5 p.m., the dollar was quoted at ¥103.24-26, up from ¥103.05-07 at the same time Monday. The euro stood at $1.3748-3750, up from $1.3700-3701, and at ¥141.95-97, up from ¥141.21-28.

The U.S. currency moved narrowly above ¥103 throughout Tuesday. Risk appetite among investors remains generally strong, but a further ascent of the dollar was held in check as Japanese stocks lacked luster, traders said.

The greenback was buoyant in the morning, rising close to ¥103.40 toward midmorning rate-fixing due to real demand-backed purchases, but buying tailed off as the Nikkei average stayed in negative territory, according to traders.

In the afternoon, the dollar showed renewed strength versus the yen following media reports that the Government Pension Investment Fund will invest in foreign infrastructure investment funds, market sources said.

The dollar faces options-related selling as it approaches ¥103.50, but its downside is firm, said an official of a bank-linked brokerage.

At lows, the dollar is being supported by a prevailing “risk off” mood because U.S. stocks remain on an upward trend, traders also said.

Many retail investors and some real demand-backed players seem eager to buy dollars at levels around ¥103, a currency market strategist said.

Market participants are shifting their focus to a two-day monetary policy meeting of the U.S. Federal Reserve from Tuesday.