The dollar firmed in listless trade Thursday, September 13, with investors unsure where to look following the unprecedented terrorist strikes on US targets. Strong anticipation for market intervention underlined sentiment.
The greenback was quoted at 119.65 yen at 11:00 am (0200 GMT) in Tokyo Thursday, up from 119.49 yen in New York and 119.36-39 yen in Tokyo late Wednesday. The euro bought 0.9050 slightly down from 0.9072 dollars in New York and 0.9067-70 dollars in Tokyo late Wednesday.
"It is very quiet this morning with people reluctant to do anything," said Marito Ueda, foreign exchange manager at Dresdner Bank in Tokyo. "Yesterday (after the terrorist attacks on New York and Washington) players persistently sold the dollar, but in Tokyo this morning people do not know what to do next," he said. "Speculation is strong for intervention and people are cautious ... I can't do anything," said Ueda.
Leaders from the world's three financial powers, the United States, Japan and Europe, have pledged to ensure stability in global financial markets, which were rocked after two hijacked planes smashed into the World Trade Center, New York's financial heart, Tuesday.
Another jet punched a hole in the Pentagon, Washington, while a fourth crashed near Pittsburgh, Pennsylvania. "If the G7 (Group of Seven richest) countries act jointly, then the situation may not be a bad as perceived," said ABN Amro foreign exchange manager Toshihiko Masaki.
Players were sidelined, awaiting for US markets to reopen, either later this week or early next, but hopes were higher that the impact of the onslaught would not be as extreme as some had originally feared. "We have to wait until the US stock market opens but if the Japanese and European markets remain stable, then people will be less worried," said Masaki.
Share prices in Tokyo rose 0.1 percent Thursday morning with the Nikkei-225 average up 11.50 points to 9,621.60 as it shed some losses made the previous day when the headline index breached the psychologically important 10,000-point mark for the first time in over 17 years.
Yen money markets were trading normally after the Bank of Japan injected an extra two trillion yen (16.67 billion dollars) into the economy Wednesday to boost liquidity levels, dealers said, adding that the chances of intervention remained strong.
"It is possible, the fall in the dollar was very unusual, it was down against everything (on Wednesday), which means that dollar denominated assets are focused on sell," said HSBC foreign exchange manager Taketo Uda.
"It should not be happening but if it does continue then even the US Treasury office may be moved to cooperate ... maybe next week," he said. Masaki from ABM Amro agreed: "I'm sure the Federal Reserve will take very strong action to deal with this."
News that Japan's current account surplus fell for the eighth month in a row in July had minimal impact on trade, dealers said. "The figures did not really have any effect, with the main focus concentrated on New York," said HSBC's Uda.
Japan's current account surplus in July fell 28.2 percent from a year earlier to 775.6 billion yen, the finance ministry said Thursday. Against the yen, the euro traded at 108.28 at 11 am against 108.80 yen in Tokyo late Wednesday. ― (AFP, Tokyo)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
