Forex - US dollar steady vs yen in Tokyo on buying by retail investors

Forex - US dollar steady vs yen in Tokyo on buying by retail investors

	Published : Mon, 10 Sep 2007 04:49 By : Agencies Print this Story

TOKYO (Thomson Financial) - The US dollar was steady against other major currencies at mid-day trading in Tokyo thanks to buying interest from Japanese retail investors, while the market continued to digest weak US jobs data.

At 12.10 pm (0310 GMT) the dollar was quoted at 112.87 yen, compared to 112.74 in early Sydney and 112.96 yen in late New York trade Friday. The euro was quoted at 1.3780 dollars, compared to 1.3778 dollars in Sydney and 1.3774 dollars in New York.

The US Labor Department reported that payrolls dropped by 4,000 in August, the first decline since August 2003. Economists had forecast payrolls would increase by 110,000.

'As the market had been awaiting the report all week as it sought to determine how well the economy was holding up amid a faltering housing market, the poor headline number had relatively large impact on the dollar,' Chuo Mitsui Trust & Banking forex trader Yosuke Hosokawa said.

'While the weak non-farm payroll data appeared to have increased the market's view about a possible rate cut at the Sept 18 FOMC meeting, it is far from clear if the rate reduction will help weaken the downward pressure on the US dollar,' he said.

But on the day, the dollar saw firm support from Japanese retail investors who have relatively large yen-selling positions.

'There is the view that unless the dollar comes down to below the 110 yen level, Japanese retail investors will not dump their position,' Hosokawa said.

'On the other hand, there is talk that Japanese institutional investors may repatriate funds invested in foreign currency-based assets ahead of the end of the first half account book, which could insert some upward pressure on the yen,' he said.

Meanwhile, a weak showing of revised real gross domestic product data helped ease dollar-selling.

The Cabinet Office said Monday the economy fell by 0.3 percent in the second quarter from the first, or an annualized rate of 1.2 percent.

In its preliminary estimate released last month, the government said the economy grew by 0.1 percent, for an annualized rate of 0.5 percent.

'The data showed that from the viewpoint of economic fundamentals, there is no strong reason to buy the yen,' Hosokawa said.

(1 US dollar=112.87 yen)

yasuhiko.seki@thomson.com

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