950804

Dollar gains against mark,

yen in Tokyo

TOKYO: The dollar was higher against the yen and gained slightly against the mark in late Tokyo. It crawled sideways most of the day after a brief rally on buying from overseas funds ended by early morning.

Trade withered in the afternoon as many hit the sidelines ahead of US July jobs data due later today and next week's Bundesbank meeting and US Treasury's quarterly refunding.

"It was a wait-and-see market this afternoon, typically seen before key data is released," a city bank dealer said.

A Reuters poll of economists on US jobs data, due at 1230 GMT, predicted an average increase of 111,000 non-farms jobs, down from 215,000 in June, with unemployment seen marginally higher at 5.7 percent.

Some dealers thought higher than expected payroll figures could boost the dollar, while weak figures could undermine its recent fragile strength, at best inhibiting buying.

Others said upbeat data could trigger sell-offs in the US Treasuries market, in turn dragging down the dollar, probably only briefly. "The dollar may prove well-supported eventually because whichever the result is, it is unlikely to trigger aggressive selling to invite intervention (by central banks)," said Hitomi Yokoyamler at Chemical Bank in Tokyo.

Many Tokyo traders stayed bullish on the dollar/yen after recent US-Japan efforts to bolster the dollar, including new deregulatory steps for Japanese investors to invest overseas unveiled on Wednesday. Its rally was largely owed to unwinding hedging short positions by Japanese investors, they said.

The dollar was boosted against the yen this morning on buying by overseas funds, but met resistance at 91.00 yen, where exporters and Japanese insurers were waiting to sell. The absence of signs of the Bank of Japan (BOJ) buying today also dampened dollar bullishness, dealers said.

"If the dollar can consolidate the bottom, it is likely to edge up to 95 yen within the next few months," said Noriyuki Takano, vice president at Chase Manhattan Bank in Tokyo.

"The dollar's floor against the yen has apparently lifted," Takano added. A Malaysian dealer said however he did not think the dollar will make lasting moves against the yen.

"After the bout of reaction to Japan's financial package and the central banks' intervention, where does that leave the dollar? The question one has to ask is, fundamentally, will the dollar be able to sustain its gains (against majors)," he said.

Some dealers said operators may be shifting their focus to the dollar/mark which had fluctuated less than the dollar/yen. The dollar hit a five-month high of 91.25 yen on Thursday.

"If Germany lowers its repo rate next week, the dollar's next target of 1.45 marks may be in sight," said another city bank dealer in Tokyo said.

DEPOSIT RATES

SINGAPORE: Asian dollar deposits were little changed in lacklustre trade, dealers said.

They said most traders were sidelined ahead of

release of the US July non-farm payroll report, which is forecast to be around 111,000 compared with 215,000 reported in June. The unemployment rate is expected to rise to 5.7 percent against June's 5.6 percent.

"Rates were a little firmer in the morning on some position adjustments. But most people are waiting on the sidelines for tonight's non-farm payrolls figures for more clues to the state of the (US) economy and inflation," a local dealer said.

"But I don't think there will be much impact here as most people have squared or are squaring their positions," he said.

In day-to-day rates, weekend and Monday/Tuesday rose 1/16 percentage point each to a common 5-7/8 5-3/4 percent, respectively.

Week-fixed was unchanged from Thursday's 5-7/8 5-3/4 percent.

Among longer dates, one-month rose 1/16 point to 5-15/16 5-13/16 percent. Three- and six-months were unchanged from Thursday's common 5-15/16 5-13/16. Twelve-months rose 1/16 point to 6 5-7/8 percent. -Reuter