The dollar hit an 18-month high against the yen in Tokyo Thursday, January 18, boosted by support for a strong dollar from US Treasury Secretary-designate Paul O'Neill, dealers said.
The greenback traded at 119.12-15 yen at 2:00 pm (0500 GMT), up sharply from 118.80 yen in New York and 117.30-33 yen in Tokyo late Wednesday.
The dollar rose to a high of 119.90 yen in Tokyo trading, the highest level since July 19, 1999.
"Investors bought back the dollar as the US next treasury secretary Paul O'Neill afffirmed the strong dollar policy will not be changed," said Mitsubishi Trust and Banking dealer Yasuharu Tsuru.
O'Neill told a Senate confirmation hearing: "I should say at the very outset I am in favor of a strong dollar." "I can't imagine that anyone would think to the contrary," he added, in reference to press speculation he might favor a weaker US currency, which had caused the dollar to falter.
"The dollar got stronger as O'Neill's remarks support a strong dollar policy," Fuji Bank dealer Hideyuki Tsukamoto agreed.
“But the yen was weak as investors were wary of the Japanese economic outlook."
“Investors think the Nikkei level of 13,000 yen could still lead to financial system concerns," Tsukamoto said. The Tokyo Stock Exchange's Nikkei-225 index rose 223.48 points, or 1.6 percent, to end Thursday morning at 13,891.11.
The euro was quoted at 111.83 yen around 2:00 pm, up sharply from 110.90 yen in New York and 110.42 yen in Tokyo late Wednesday.
Against the dollar, the euro remained below $0.9400 in response to the release of benign US inflation figures. The euro bought $0.9374, up from $0.9335 in New York, but down from $0.9410-13 in Tokyo Wednesday afternoon. At one point in London trade, the euro had briefly fallen to 0.9290, its lowest level since the end of December.
"Investors bought the dollar as the US consumer price index remained almost flat," Mitsubishi Trust and Banking's Tsuru said. US consumer prices rose 0.2-percent in December and were up 3.4-percent year-on-year, the Labor Department said Wednesday.
The core rate, which excludes volatile energy and food prices, increased 0.1-percent, and was up 2.6-percent for the year.
"Investors thought the gap between the US and European economies is shrinking," Tsuru added.—(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)
