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Dollar steady vs yen, supported by investor bids

TOKYO: The dollar was steady against the yen in late Thursday trading, as dollar buying by Japanese investors for investment in foreign securities was offset by dollar selling by Japanese exporters.

The euro firmed against both the yen and dollar.

"There has been a lot of fresh buying by Japanese investors. This is real money going into both Europe and the United States," said a dealer for a European bank. "I think it's safe to say that the dollar has hit a near-term bottom...and I wouldn't rule out a rise to 110 yen this week."

Yet other dealers doubted the dollar could extend gains much beyond 108 yen ahead of the release of the Bank of Japan's "tankan" business sentiment survey on April 3, which may provide evidence Japan's economy is growing again.

The dollar was trading at 107.37/40 yen, unchanged from 107.37 yen in late US trading on Wednesday. Its intra-day high was 107.63 yen.

The euro was quoted at $0.9614/19 against $0.9603 in late US trading.

Dollar-buying by Japanese investors indicated fund repatriation ahead of Japan's business year-end on March 31 had past its peak. The resilience of US stocks also suppported the dollar.

"There's a growing view that the US Federal Reserve may only raise interest rates once or twice more before the end of the (calendar) year, which has dampened concerns that US stocks might fall sharply going forward," said a dealer for a major city bank.

The market shrugged off Japanese trade data for February, released early on Thursday, which showed a 26.8 percent year-on-year rise in the customs-cleared trade surplus to 1.181 trillion yen.

Although the surplus rose for the first time in 11 months, economists said it was still on a declining trend.

"Today's trade figures indicate that the surplus probably will not decline so sharply, although a downtrend is likely to be maintained," said Mitsumaru Kumagai, a senior economist at IBJ Securities. "As Japan's surplus is likely to remain at a high level, the trade data is unlikely be a factor that contributes to yen weakness."-Reuters