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Dollar rebounds to around 95 yen line in Tokyo on buybacks+
(Japan Economic Newswire Via Acquire Media NewsEdge) TOKYO, Nov. 21_(Kyodo) _ The U.S. dollar rebounded to around the 95 yen line Friday in Tokyo after diving to about a one-month low in the upper 93 yen zone on buying, especially by Japanese importers, before a long weekend in Japan.
The euro also rallied to the 119 yen line after falling to a three-week low in the upper 116 yen zone as many Asian equities reversed losses, despite a 5 percent equity decline overnight in the United States.
At 5 p.m., the dollar fetched 94.98-95.00 yen, against Thursday's 5 p.m. quotes of 93.65-75 yen in New York and 95.23-26 yen in Tokyo. It moved between 93.65 yen and 95.17 yen during the day, changing hands most frequently at 94.20 yen. The dollar last traded in the 93 yen range in Tokyo in late October.
The euro traded at $1.2536-2538 and 119.07-11 yen, against late Thursday's quotes of $1.2449-2459 and 116.69-79 yen in New York and $1.2507-2509 and 119.12-16 yen in Tokyo.
The U.S. dollar hovered at the upper 93 yen level early in the morning, but gradually trailed north as Japanese importers and other market participants quickly picked up the currency at lows ahead of a three-day weekend, dealers said.
"Commercial buying and investors' buying on dips are the main factors pushing the dollar upward," said Akihiro Tanaka, a senior trader at Resona Bank.
Also underpinning the dollar was "a sense of caution" that the Bank of Japan could intervene in the market should the U.S. currency continue to drop sharply below the 95 yen level, Tanaka said.
Such views heightened after Finance Minister Shoichi Nakagawa expressed his resolve Friday morning to avoid violent moves in stock and foreign exchange markets.
"Drastic movements are not at all desirable. We have to firmly implement measures to tackle such fluctuations," he said in a luncheon speech at the Foreign Correspondents' Club of Japan in Tokyo.
Currency analysts added that market players were also hesitant in aggressively selling their dollar holdings as they followed developments of the fate of cash-strapped U.S. automakers known as the "Big Three."
"Their fate is the hottest topic," said Minoru Shioiri, chief manager of the foreign exchange and credit division at Mitsubishi UFJ Securities Co., adding that "the mood in the market could change depending on the type of news" that may come out over the weekend.
There had been some optimism in financial markets that the Detroit-based automakers would gain a government bailout of $25 billion in loans from a $700 billion financial rescue fund.
But worries gradually took the upper hand after Democratic leaders in the U.S. Congress said Thursday they will postpone a vote on the bailout until December.
As for the euro, it rose against the yen and the dollar on buybacks and because a turnaround in Asian equities partly improved investor tolerance for risks, dealers said.
Japan's key Nikkei stock index erased a 3.8 percent intraday loss to close about 2.7 percent higher at 7,910.79.
Meanwhile, the foreign exchange market mostly ignored the BOJ's decision to leave its benchmark short-term interest rate unchanged at 0.3 percent as the move had been widely expected, dealers said.
Copyright ? 2008 Kyodo News International, Inc.
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