TOKYO, April 24 (Kyodo) — By: Mutsuo Fukushima The U.S. dollar skidded against the yen Thursday in Tokyo as traders were disheartened at a slew of dollar-bearish news and the rumored bankruptcy of a U.S. hedge fund.
At 5 p.m., the dollar was quoted at 119.90-94 yen, down from the 5 p.m. Wednesday quotes of 120.25-35 yen in New York and 120.04-08 yen in Tokyo.
At 9 a.m., the dollar fetched 120.57-61 yen and then hovered along the 120.50 yen line until around noon, when a plethora of dollar-negative rumors and news began sweeping the market.
They included the hedge fund bankruptcy, reported bankruptcy filing preparations by AMR Corp., the holding company of American Airlines, and a dive in a U.S. stock futures index, dealers said.
The U.S. currency moved between 119.71 yen and 120.70 yen Thursday, trading most frequently at 119.95 yen.
At 5 p.m., the euro was quoted at $1.1022-1026 and 132.18-22 yen, compared with Wednesday’s 5 p.m. quotes of $1.0970-0980 and 131.95-132.05 yen in New York.
Naoya Taguchi, vice president of UFJ Bank’s foreign exchange department, said, ”When the rumor swept through the market that a U.S. hedge fund went belly-up, it fueled dollar-selling momentum.”
The rumor prompted traders to dump dollars by supporting their view that the health of the U.S. stock market and economy is becoming fragile, he said.
Junya Tanase, global markets officer at JP Morgan Chase Bank, said the news that AMR is preparing to file for court-supervised bankruptcy proceedings possibly later Thursday appears to have added fuel to the dollar-bearishness among traders.
Shigehiko Kamimura, foreign exchange manager at Resona Bank, said the rumored bankruptcy of the U.S. hedge fund initially prompted traders to unwind their long-euro and short-yen positions.
Then, the unwinding of the long-euro positions led traders to adjust their long-dollar and short-yen positions, Kamimura said.
He noted that the afternoon dive in the Nasdaq-100 futures on the Chicago Mercantile Exchange (CME) also fueled sales of the dollar for the yen. The futures index is monitored for the direction of U.S. spot share prices around the world due to the CME’s 24-hour computerized trading system.
”Composite factors appear to be behind the day’s fall of the dollar against the yen,” he said, referring to the hedge fund bankruptcy rumor and the futures index dive.
