TOKYO, Mar. 26, 2009 (Kyodo News International) -- The U.S. dollar advanced to the lower 98 yen range Thursday in Tokyo as yen-selling for the euro amid growing risk appetite on the back of solid global equity markets lifted the dollar relative to the Japanese currency.
At 5 p.m., the dollar fetched 98.09-12 yen against Wednesday's 5 p.m. quotes of 97.50-60 yen in New York and 97.71-74 yen in Tokyo.
The currency moved between 97.45 yen and 98.22 yen during the day, changing hands most frequently at 97.77 yen.
The euro traded at $1.3577-3580 and 133.20-24 yen versus $1.3579-3589 and 132.47-57 yen in New York and $1.3448-3451 and 131.43-47 yen in Tokyo late Wednesday.
The dollar traded at the upper 97 yen level during most of Tokyo trading hours after a sharp drop overnight in New York, where it briefly tumbled to 96.90 yen on a speech by U.S. Treasury Secretary Timothy Geithner saying that a proposal to allow an expanded role for Special Drawing Rights, a reserve asset at the International Monetary Fund, ''deserves some consideration.''
The remark was taken by the currency market as suggesting his willingness to review the dollar's current status as the world's prime reserve currency, although he later denied such a view.
The yen also faced selling pressure for the euro as investors bought the higher-yielding currency amid growing risk appetite, dealers said. In late afternoon trading, yen-selling picked up its pace, sending the dollar above the 98 yen line and the euro to the lower 133 yen range.
''The euro was bought for the yen on the back of recent firm stock markets and this supported the dollar relative to the yen,'' said Toru Umemoto, chief foreign exchange strategist at Barclays Bank.
Tokyo stocks ended higher Thursday, sending the key Nikkei index to a two-and-a-half-month closing high of 8,636.33. New York stocks also rose moderately Wednesday, with the bellwether Dow Jones Industrial Average rising 89.84 points to 7,749.81.
While there will be no major market-moving events through early next week, the dollar-yen rate may go through a wild swing, particularly next Tuesday, the last day of the current business year for many Japanese companies, Umemoto said.
''Since both yen-selling and yen-buying could occur when Japanese firms close their books, the currency market could be very volatile,'' he added.
Osamu Takashima, chief analyst of the global markets sales and trading division at the Bank of Tokyo-Mitsubishi UFJ, expects the dollar will continue to stand firm relative to the yen for a while.
''Japanese exporters are unlikely to sell the U.S. currency at the current 97 yen level after it topped the 99 yen line recently,'' he said, adding a recent pickup in U.S. long-term interest rates also fueled dollar-buying.
