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Dollar plunges against

yen, mark in Tokyo

TOKYO: The dollar was down against the yen and the mark but off earlier lows after a day of thin, choppy trade, powered largely by movements in cross-trading.

The mark's early strength against the French franc had ebbed by late Tokyo trade. But the greenback drifted in a relatively narrow range, with the holidays in the Hong Kong and London markets dampening activity.

Lingering mark strength and a lack of buying incentives were seen keeping the dollar's topside weighted against both the yen and the mark. But its downside was seen solid at around 96.30 yen and 1.4670 marks, close to its Friday New York lows.

The mark gained sharply against European currencies during early Tokyo time on buying sentiment carried over from Friday trade, when the resignation of French Finance Minister Alain Madelin plunged markets into uncertainty about French policy continuity, dealers said.

Madelin resigned on Friday over a clash about welfare handouts and public sector benefits.

Although his successor, Jean Artuis, until now minister for economic development and planning, said he would push for all of Chirac's deficit-slashing but job-creating policies, the market was unsure.

"Uncertainty whether Madelin's successor will make a commitment to curb budget spending could help weaken the French franc against the mark," a European bank dealer said.

Although the mark rose as far as 3.4578 francs by mid-afternoon Tokyo, it had fallen as low as 3.4485/95 francs by 0655 GMT as European markets opened and franc short-covering emerged.

But the dollar's recovery remained listless. "Many of the people active in the market today are holding very light positions and merely adjusting them as necessary," a trust bank dealer said.

Selling by overseas funds, which had pulled the dollar lower during morning Tokyo trade, was seen likely to emerge should the dollar rise again, keeping gains capped. Some exporter and interbank selling was also reported.

Bids were seen at 96.30 yen from various operators, including life insurers and possibly trust banks. Concern about Bank of Japan (BOJ) intervention below that level also served as a selling deterrent.

The mark had risen slightly from its mid-afternoon lows against the yen but remained trapped in a 65.50-65.80 yen range. Dealers said a renewed try for 66 yen was not unlikely in the short term.

SINGAPORE: Asian dollar deposits were little changed in moderate trade with most traders sidelined on lack of fresh incentives, dealers said.

"Rates are a little bit mixed this morning on position adjustments. But there was no fresh news in the afternoon and most people are sitting on the sidelines," a local dealer said.

"There was hardly any impact from last Friday's economic data and most people are waiting for Tuesday's (U.S. July) new home sales and (August) consumer confidence data, for more clues to market direction," he said.

In short dates, Monday/Tuesday rose 1/16 percentage point to 5-7/8 5-3/4 percent, Tuesday/Wednesday rose 1/8 point to 5-15/16 5-13/16 and week-fixed rose 1/16 point to 5-15/16 5-13/16 percent.

Among longer dates, one- and three-months eased 1/16 point each to a common 5-15/16 5-13/16 percent. Nine-months eased 1/16 point to 6 5-7/8 and twelve-months slipped 1/8 point to 6 5-7/8 percent.-Reuter