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Dollar rises to lower 90 yen on expectations for U.S. stimulus package+(Japan Economic Newswire Via Acquire Media NewsEdge) TOKYO, Jan. 16_(Kyodo) _ The U.S. dollar strengthened against the yen Friday in Tokyo after market players took a positive cue from a series of U.S. economy-boosting measures aimed at putting the ailing economy back on a recovery track. At 5 p.m., the dollar fetched 90.29-32 yen against Thursday's 5 p.m. quotes of 89.79-89 yen in New York and 89.07-09 yen in Tokyo. The U.S. currency moved between 89.74 yen and 90.58 yen during the day, changing hands most frequently at 90.30 yen. The euro traded at $1.3237-3240 and 119.54-58 yen against $1.3115-3125 and 117.80-90 yen in New York, and $1.3149-3150 and 117.12-16 yen in Tokyo late Thursday. After entering Tokyo trading just below the 90 yen line, the dollar rose to as high as 90.58 yen and remained in the lower 90 yen level for most of Tokyo trading as market players were reassured by the U.S. government's handling of the recession-hit economy. "Federal spending, along with tax cuts, will help revive the economy and create jobs as (President-elect) Barack Obama has pledged," which is positive for the U.S. currency, said Ryohei Muramatsu, manager of Group Treasury Asia at Commerzbank in Tokyo. On Thursday, Democrats in the House of Representatives unveiled details of a stimulus package worth $825 billion to shore up the U.S. economy. The plan includes $550 billion for spending on areas such as clean and efficient energy, infrastructure, education and healthcare, and $275 billion for tax cuts. The U.S. dollar was also lifted by the U.S. government's decision to provide additional financial aid to Bank of America Corp., which has acquired struggling Merrill Lynch & Co., dealers said. After the U.S. Senate approved the use of the remaining $350 billion of the Troubled Assets Relief Program, the U.S. Treasury Department said Friday it will tap $20 billion from the rescue fund for Bank of America. But Daisuke Uno, market strategist for Sumitomo Mitsui Banking Corp., said that the U.S. dollar will weaken against the yen down the road as "the effectiveness of Obama's stimulus package (on the real economy) is yet to be seen" and concern about the U.S. financial sector has not been alleviated. Further evidence of the worsening state of the U.S. economy also lies ahead, he added. U.S. data including consumer prices and industrial production for December are due out later in the day. The euro gained strength against both the dollar and the yen after investors bought back the currency for quick profits following Thursday's interest rate cut by the European Central Bank, dealers said. The European Central Bank cut the base rate by 0.5 percentage point to 2.0 percent, which was within market expectations, bringing the rate to its lowest level since the 1999 launch of the single European currency. Copyright ? 2009 Kyodo News International, Inc. |