TOKYO, Nov. 21 (Kyodo) — The U.S. dollar rose slightly against the yen Friday morning in Tokyo as some U.S. hedge funds converted yen-denominated shareholdings into dollars to repatriate prior tothe Nov. 30 book-closings.
The late-morning dollar selling pared most of the dollar’s morning gains amid persistent bearishness toward the U.S. currency, which has been battered by a string of suicide bombings in Iraq and Turkey as well as chronic U.S. current-account deficits, traders said.
At noon, the dollar traded at 109.07-09 yen, up from Thursday’s 5 p.m. quotes of 108.95-109.05 yen in New York and 108.92-95 yen in Tokyo.
It moved between 108.94 yen and 109.40 yen in the morning.
”Market players bought back the dollar as they expect hedge funds to continue to purchase the dollar against the yen toward the Nov. 30 book-closings,” said Ryohei Muramatsu, manager of the Group Treasury Asia at Commerzbank.
Currency traders said the need of most of U.S. hedge funds to convert Japanese stock holdings into dollars to pad their books prior to the Nov. 30 book-closings appears to have offset some of growing downward pressure on the U.S. currency, bruised by a string of recent suicide bombing attacks by Islamic extremists.
The renewed threat of dollar-supportive interventions by Japanese monetary authorities may have acted as another prop for the dollar’s value as the authorities turned the screws on yen bulls to clear long-yen positions with Wednesday’s estimated 1 trillion yen intervention, traders said.
But Muramatsu said, ”It was not immediately known whether the Bank of Japan intervened this morning.”
Shigehiko Kamimura, a manager at Resona Bank’s market trading division, said the dollar’s early morning gains might have been side-effects of the euro’s morning advance against the yen, adding that investors bought the euro against the yen in light of rumors the Japanese government is considering funneling public funds into the depleted capital base of a regional bank.
