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Dollar nears ¥103 on U.S. hopes

JIJI

The dollar gained further ground in trading Friday, rising to near ¥103 thanks to hopes for a U.S. economic recovery.

At 5 p.m., the dollar stood at ¥102.94-95, up from ¥102.85-86 at the same time Thursday. The euro was at $1.3378-3380, down from $1.3395-3396, and at ¥137.72-76, against ¥137.78-79.

The dollar attracted moderate buying despite a slide in Tokyo stock prices, which tends to trigger risk-averse yen buying.

“The dollar stayed solid against the yen because the fall in Tokyo stocks was limited” despite a sharp fall in New York stocks overnight, an official at a foreign exchange margin trading service firm said.

“The dollar appears to be chasing higher ground as investors’ expectations for a U.S. economic recovery remains strong,” an official at a foreign exchange broker said.

The dollar tried to top ¥103 in late trading when European investors joined the market, sources said.

But it failed to surpass the threshold as investors retreated to the sidelines before the release later on Friday of closely watched U.S. jobs data, market sources said.

Economists forecast an increase of 230,000 in U.S. nonfarm payrolls in July from the previous month.

Investors have factored in the estimated payroll growth. But an official at a major Japanese bank said that “the dollar is expected to attract purchases if U.S. long-term interest rates rise” on such upbeat numbers.

The dollar tends to attract purchases for yen as recent economic data have shown that the Japanese and U.S. economies are in the opposite direction with each other, an official at a major securities house said.

But an official at another foreign exchange margin trading service firm said that “the dollar is facing sell orders from real demand-backed players at levels around 103.¥10-15.”

Still, the official added that the dollar may rise sharply to around ¥103.50 as there is speculation that the greenback will trigger stop-loss buy orders once it tops ¥103.20.