(Reuters) - The rupee weakened on Thursday as payments for oil imports picked up, while the dollar's rise after Japan intervened to stem the yen's strength also weighed.
Refiners have been buying dollars for days to clear dues of about $5 billion to Iran. The payments had been held up for seven months after the Indian central bank scrapped a clearing mechanism last December.
At 10:57 a.m. (0527 GMT), the partially convertible rupee was at 44.4350/4400 per dollar, 0.3 percent weaker than Wednesday's close of 44.31/32.
Traders said exporters were cashing in their dollars and this should keep the rupee rangebound at 44.30-44.45 during the day.
"There is demand from oil importers, but it is met with supply from software exporters. That is why it is likely to be rangebound," a forex trader with a state-run bank said.
The dollar rose above 79 yen for the first time in two weeks on Thursday as the Bank of Japan intervened in the currency market intermittently to stem the yen's strength.
The index of the dollar against six major currencies was up 0.7 percent at 74.562 points.
The euro was at $1.4273, compared with $1.4290 when the rupee closed on Wednesday and traders said the single currency would be watched for direction.
Oil posted a modest rebound from one-month lows tracking a bounce in Asian stock markets ahead of key U.S. employment reports expected to shed further light on whether a recovery in the world's largest economy is faltering.
Indian shares were trading up 0.3 percent after falling to their lowest close in nearly six weeks in the previous session.
The one-month onshore forward premium was at 21.25 points from 22.50 on Wednesday, while the three-month was at 64.25 points from 67.75 and the one-year was at 212 points from 217.75.
One-month offshore non-deliverable forward contracts were quoted at 44.58, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange was at 44.5950 while on the MCX-SX and the United Stock Exchange were at 44.5925. Total volume stood at $3.4 billion.
(Reporting by Shamik Paul; Editing by Ranjit Gangadharan)
