950830

Dollar stronger against yen

in late Tokyo trading

TOKYO: The dollar was stronger against the yen in late Tokyo, but off earlier highs as dollar buying triggered by news agencies' reports that operations at Japan's biggest credit union Kizu Shinyo Kumiai would be suspended was short-lived, dealers said.

Strong interest by Japanese exporters and life insurers to sell the dollar at around 98.50 yen capped rises, they added.

The dollar was given a boost against the yen in early afternoon on reports by Quick News Agency that the Osaka prefectural government had decided to suspend some business of Kizu Shinyo Kumiai, dealers said.

An Osaka prefectural government official told Reuters that the local government may order a partial suspension of the business of Kizu Shinyo Kumiai, depending on deposit withdrawals from the credit union.

The dollar had risen from early Asian trade, taking on a bullish sentiment carried over from higher closes in overnight New York trade, dealers said.

The rumour was interpreted as implying an imminent Japanese rate cut, dealers said.

The market has become sensitive to interest rate talk as the dollar's overnight surge was ignited by renewed prospects of lower German rates and steady U.S. rates, they added.

But dealers said U.S. funds were also taking profits at around 98.30 yen. Some Japanese life insurers were also said to be selling, with offers placed around 98.40 yen.

Although the impact of the Kizu reports was short-lived, dealers said news suggesting weakness of the Japanese financial system would be a yen-selling factor in the future.

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

They said most traders were sidelined ahead of tonight's 1230 GMT release of the U.S. second quarter gross domestic product (GDP) data, which are forecast to be unchanged from the previous quarter 0.5 percent gain.

"Rates were a little bit mixed in the morning. There was no fresh news in the afternoon and most people are sitting on the sidelines. The second quarter GDP figures due later tonight will probably be a non-event unless the numbers are way off market expectations," a local dealer said.

In day-to-day rates, Wednesday/Thursday slipped 1/8 percentage point to 5-3/4 5-5/8 percent and Thursday/Friday eased 1/16 point to 5-7/8 5-3/4 percent.

Week-fixed was unchanged from Tuesday's 5-15/16 5-13/16 percent.

Longer dates were marked up slightly. One-, three-, six- and twelve-months rose 1/16 point each to a common 6 5-7/8 percent.-Reuter