TOKYO (Kyodo) -- The U.S. dollar remained boxed in the mid-77 yen level Friday in Tokyo in the absence of major trading incentives and due to a national holiday in the United States, Veterans Day. At 5 p.m., the dollar fetched 77.45-46 yen, compared with Thursday's 5 p.m. quotes of 77.59-69 yen in New York and 77.64-65 yen in Tokyo. It moved between 77.37 yen and 77.69 yen during the day, changing hands most frequently at 77.55 yen. The euro traded at $1.3623-3624 and 105.51-55 yen against $1.3612-3622 and 105.60-70 yen in New York and $1.3496-3497 and 104.78-82 yen in Tokyo late Thursday. The dollar is supported at the current level by the belief Japanese authorities might intervene in the market again to weaken the Japanese currency, dealers say. The last time Tokyo stepped into the currency market on Oct. 31, Finance Minister Jun Azumi hinted at the possibility of further interventions, saying Tokyo will take action against speculators until it is "satisfied." But some analysts are skeptical about whether such currency interventions will be effective over time in propping up the dollar against the yen. "It is doubtful whether Japan can keep intervening in a substantial way as it did on Oct. 31," said Masafumi Yamamoto, chief foreign exchange strategist at Barclays Bank. "It is difficult to buck (the dollar's downward) trend through market interventions," said Teppei Ino, analyst of global currency research at the Bank of Tokyo-Mitsubishi UFJ. "It would be hard for Japan to intervene unless the dollar drops as low as 75 or 74 yen." Given the persistent instability of some eurozone economies, investors are likely to buy the yen for its perceived safety, pushing down the dollar and the euro, market watchers say. The euro stayed firm against the dollar and the yen after new Italian 12-month bills found good demand in an auction and yields on Italy's 10-year bonds slid below the critical 7 percent threshold, lowering the country's borrowing costs. The 7 percent level is symbolic in that Greece and Portugal faced bailouts when their yields hit that level. But this is not a cause for optimism about the prospects of the eurozone as negotiations on strengthening its bailout fund, the European Financial Stability Facility, show few signs of major progress, while the Italian parliament has yet to pass fiscal austerity measures, analysts say. France is another potential trouble spot that deserves market attention because there has been speculation about the country's losing its top credit rating, they say.

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