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Dollar up in late

Tokyo, swung by

summers comments

TOKYO: The dollar was standing higher in late Tokyo trade on Wednesday after fluctuating on rumours and subsequent denials of comments by U.S. Deputy Treasury Secretary Lawrence Summers.

Talk that Summers said the U.S. would tolerate a dollar rise to 110-115 yen sent the greenback as high as 108.60 yen in morning trade, but it eased as a U.S. official denied the talk.

"Reports that Deputy Secretary Summers referred to any specific level for the dollar at a breakfast on Wednesday are inaccurate," a U.S. Treasury spokesman said.

"Deputy Treasury Secretary Summers only reiterated the long-standing U.S. policy that a strong American dollar is in the national interest," Deputy White House Press Secretary Ginny Terzano said.

Summers also declined to comment on whether he and Japanese Finance Minister Wataru Kubo discussed currencies at their afternoon meeting. Summers is in Tokyo accompanying President Bill Clinton on a three-day state visit, which began Tuesday.

A senior Finance Ministry official, who briefed reporters after the meeting, said Kubo and Summers reaffirmed currency cooperation among the Group of Seven (G7) major nations but did not discuss any specific currency levels.

Dealers said Japanese banks and U.S. funds appeared to have bought dollars in morning trade, but some Japanese investors moved to sell them on rises, capping the dollar's rise.

Although dealers stayed on their toes throughout the day for fresh comments from U.S. officials, the market turned a blind eye to a summit meeting between U.S. President Bill Clinton and Japanese Prime Minister Ryutaro Hashimoto.

"What came out of the (summit) meeting was well expected. It fell short of affecting the market," said Yasuhito Kawashima, chief manager at Toyo Trust & Banking Co.

Clinton told a joint news conference after the meeting that the U.S.-Japan trade relationship is "on the right track", but added that there was still work to be done in the insurance, semiconductor and photographic film sectors.

Meanwhile, the dollar remained firmly supported against the mark on lingering expectations of an imminent German credit easing, dealers said. They said U.S. funds had shown interest to buy at around 1.5070 marks, providing a solid floor.

The Bundesbank will hold its council meeting on Thursday.

A Reuter poll conducted in Germany showed that only three out of 15 economists surveyed predicted the Bundesbank will cut its key discount and Lombard rates on Thursday.-Reuter