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Dollar nears $104 on solid U.S. data

JIJI

The dollar advanced close to ¥104 in Tokyo trading Wednesday, with investors’ risk appetite fueled by solid U.S. manufacturing data released overnight.

At 5 p.m., the dollar stood at ¥103.80-81, up from ¥103.30-32 at the same time Tuesday. The euro was at $1.3802-3802, up from $1.3794-3795, and at ¥143.27-29, up from ¥142.50-53.

The U.S. Institute for Supply Management’s manufacturing business index improved to 53.7 in March from 53.2 a month before, pushing up the greenback and U.S. equities overnight.

In Tokyo, the U.S. currency topped its recent peak of around ¥103.75 and rose above ¥103.90 at one point, also supported by demand from Japanese importers, traders said.

“The dollar is now seen testing the ¥104 level,” an official at a currency brokerage firm said.

Meanwhile, a Bank of Japan survey showed Wednesday that Japanese companies project inflation to reach 1.5 percent in the coming year, falling short of the central bank’s target of 2.0 percent.

“The yen’s downtrend will remain in place on unabated hopes that the BOJ will take additional monetary easing steps to achieve the inflation goal,” an official at a foreign-affiliated bank said.

Still, the dollar’s topside was capped by selling to lock in profits, as well as caution among traders ahead of Friday’s release of the U.S. government’s key jobs data for March.

The improvement in the ISM index “increased expectations for strong readings in the March jobs report,” an official at a major Japanese bank said.