Business / Financial Markets | CURRENCY MARKET

Dollar slightly firmer above ¥113.80 in Tokyo trading

JIJI

The dollar was trading slightly above ¥113.80 in late Friday trading in Tokyo after cutting some of its earlier gains in the face of position-adjustment sales ahead of the weekend.

At 5 p.m., the dollar stood at ¥113.84-85, up from ¥113.69-70 at the same time Thursday. The euro was at $1.1336-1337, down from $1.1435-1435, and at ¥129.06-06, down from ¥130.02-02.

The dollar moved around ¥114.00-10 in early trading, inheriting its overnight strength abroad and reflecting hopes that the U.S. Federal Reserve will raise interest rates at its next policy meeting in December on the back of its upbeat view of the U.S. economy.

At its two-day meeting through Thursday, the U.S. central bank’s Federal Open Market Committee decided to keep its federal funds rate target range at 2.0-2.25 percent. But in a policy statement, the Fed indicated its plans to continue raising its rate target gradually, saying economic activity has been rising “at a strong rate.”

After the early firmness, however, the greenback fell below ¥113.90 toward noon Friday in Tokyo, pressured by profit-taking and sales induced by a decline in the benchmark Nikkei stock average, traders said.

“Selling on a rally grew when the dollar rose near one-month highs around ¥114,” an official of a foreign-exchange margin trading service firm said.

Still, the dollar “was hunted around ¥113.80 on expectations for a wider gap between U.S. and Japanese interest rates” following the Fed statement, the official said.

The dollar’s topside was capped amid concerns about possible economic slowdowns in Europe and China, and uncertainty over fiscal conditions in Italy, market sources said.