The yen rose against the dollar in Tokyo Monday on an unfounded rumor that US Treasury Secretary Lawrence Summers had come out in favor of a stronger Japanese currency, dealers said.
The yen was quoted at 108.08-11 yen at 2:00 p.m. (0500 GMT), up from 108.36 yen in New York and 108.94 yen in Tokyo late Friday.
Summers' alleged remarks Friday that Tokyo may also support a stronger yen would have represented a major shift in the Japanese government's position, which is that a strong currency is economically harmful.
"The dollar was sold as the rumor spread among dealers that US Treasury Secretary Summers had made a statement favorable to a higher yen," said Bank of Tokyo-Mitsubishi dealer Kiyoshi Kuzuhara.
There was no substance to the comments but "it was a very well-timed rumor," said ABN AMRO foreign exchange manager Toshihiko Masaki.
"Sentiment for dollar-yen was so bullish, at least until Thursday, so Summers was the trigger for position adjustments," he said.
The euro traded at 0.9069-72 dollars around 2:00 p.m., up slightly from $0.9065 in New York but down from $0.9152 in Tokyo late Friday.
Euro trading made a sluggish start to the week, due in part to caution ahead of a US Federal Reserve policymaking meeting starting Tuesday, dealers in Singapore said.
The US central bank is expected to maintain current interest rates, but players will pore over the Fed's outlook on prospects for monetary policy, they said.
"Any hawkish tones in the Fed's statement this week, which is the risk, could boost market pricing of tightening expectations ... which could support the US dollar," said research house IDEAglobal.com.
Against the yen, the euro was quoted at 98.11 against 98.22 in New York and 99.71 in Tokyo Friday. — (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
