WSJ:WORLD FOREX:Dollar Unchanged Vs Yen; Intervention Risk Remains
By Takashi Mochizuki
Of DOW JONES NEWSWIRES
TOKYO -(Dow Jones)- The dollar was largely unchanged against the yen on Tuesday in Asia as yen-buying amid cautious optimism about the European debt issue canceled out yen-selling by Japanese companies acquiring foreign resources.
The greenback was at Y76.10 as of 0450 GMT after trading in a narrow Y76.06-76.24 range in Asia. It was Y76.09 on Monday in New York.
Traders have been cautiously optimistic about European debt problems ahead of a key Wednesday meeting of regional leaders on the issue, at which a plan to ease market jitters is expected to be announced.
On the back of such speculation, investors sold the greenback against the euro and yen, said Barclays Capital chief strategist Masafumi Yamamoto.
But the yen-buying by investors offloading the dollar was canceled out by Japanese companies' yen-selling as a result of purchases of overseas resources and acquisitions, dealers said.
"I am seeing constant yen-selling by Japanese firms that is probably related to the buying of overseas resources and direct investment," said Osamu Takashima, chief strategist at Citibank Japan.
Despite the Japanese currency being stuck in a narrow range, Japanese officials expressed their discomfort over the yen's level again on Tuesday, reiterating that Tokyo will take action should it become necessary.
The euro was at $1.3906 and Y105.84 from $1.3929 and Y106.02 in New York on Monday. The euro traded higher at the start of the session but gave up its gains as Japanese share prices fell into negative territory.
Looking ahead, investors expect quiet trading in the euro until the outcome of the Wednesday meeting is known.
The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 76.155 from 76.083.
Interbank Foreign Exchange Rates At 0050 EDT / 0450 GMT
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