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Dollar up, but off highs

in late Tokyo trading

TOKYO: The dollar stayed around 97 yen in late Tokyo trading but was off early rises spurred by a spate of buying from interbank traders and overseas operators in afternoon trade, Tokyo dealers said.

"The gains were mainly technical and within expectations. But I doubt that the dollar will keep rising amid the absence of fresh buying factor," a senior trust bank dealer said.

The dollar suddenly rose as high as around 97.25 yen in afternoon trade after range-bound trade in the morning.

Some attributed the gains to news that the IMF had once again urged Tokyo to cut interest rates to help spur growth.

The IMF has cut its forecast for growth in major industrial nations for this year and next as the economies of the United States, Japan and Europe have lagged, international monetary sources said.

Dealers said this and similar reports by Japanese media during the afternoon session sparked dollar buying.

Some dealers also said lingering concerns over the Japanese banking system after Japanese authorities' announcement of a scheme to deal with troubled credit union Cosmo Shinyo Kumiai on Monday also encouraged dollar buying.

But the trust bank dealer said these were all seen as excuses to buy dollars on a short-term basis. "Even with last week's German credit easing, the dollar failed to rise above 97.40/50 yen. It is doubtful that the the dollar will break through that point easily without fresh buying factors," said the trust bank dealer. Mark buying against the yen in cross trading also gave indirect support to the dollar/yen rate.

A U.S. bank dealer in Tokyo said a clear trend for the dollar/yen rate may not be formed until the announcement of Japan's economic measures around September 20.

"If the measures look disappointing, operators may rush to sell dollars again," he added.

Finance Minister Masayoshi Takemura told a news conference today that a package of economic steps will be aimed at putting the Japanese economy securely on a recovery track.

He said the package would be designed to wipe out any uncertainty about the state of the economy.

The mark's strength following the resignation of the French finance minister last Friday appeared to run out of steam, but Tokyo dealers expected the mark's firmness to continue and this could drag on the dollar/yen rate.

SINGAPORE: Asian dollar deposits were quietly steady in lacklustre trade, dealers said.

Most traders were sidelined ahead of tonight's 1400 GMT release of the US July new homes sales and August consumer confidence data, they said.

New home sales for July is forecast to be around 712,000 million annualized units compared with 728,000 reported in June.

The August consumer confidence index is expected to rise to 100.5 percent against July's 99.9 percent.

"The market was a little bit softer in the morning and there was no fresh news in the afternoon," a local dealer said.

"Everyone is waiting on the sidelines for more cluse to market direction from tonight's release of the new homes sales and consumer confidence figures," he said.

In day-to-day rates, Tuesday/Wednesday slipped 1/8 percentage point to 5-13/16 5-11/16 percent and Wednesday/Thursday eased 1/16 point to 5-7/8 5-3/4 percent. Week-fixed was unchanged from Monday's 5-15/16 5-13/16 percent.

Among longer dates, one-and six-months were unchanged from Monday's common 5-15/16 5-13/16 percent, respectively. Nine-and twelve-months eased 1/16 point each to a common 5-15/16 5-13/16 percent, accordingly.-Reuter