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Dollar gains against

yen in Tokyo

TOKYO: The dollar gained against the yen, primarily on a buying spree by Japanese institutional investors keen to buy dollars on dips after missing out on the quick rally on Wednesday which saw it hit 99.05 yen.

"There was a large volume of buying by investors, which reinforced the perception that they have not purchased enough dollars and that the dollar's floor was firm," a dealer said.

Investors included trust banks and life insurance firms who assumed the dollar should resume testing the upside to 100 yen, while sellers were US hedge funds and some Japanese exporters who have returned to work after the holidays.

On top of private investors' buying, yen selling by public funds' for Australian dollars and marks also supported the dollar/yen rate indirectly, said a European bank dealer.

The dollar's advance to 1.4800 marks on stop-loss buying also added strength to the dollar/yen exchange rate.

Many traders have started to feel that the US dollar, which once looked set to breach 100 yen easily earlier this week, may come into a 96.00-100 yen boxed range for a while.

The possibility that Japan's government may take fresh measures to correct yen's rise and of another dollar buying spree by central banks has kept dollar sentiment firm.

Finance ministry officials said Sakakibara is visiting Aspen, Colorado to attend a meeting of "influential officials". They gave no more details.

A Japanese bank dealer in Singapore said the dollar was firmer on the back of reports of unusual Iraqi troop movements.

One Tokyo dealer also said Chinese military tests near Taiwan might have contributed to yen-selling against the dollar because of raised tension in Asia.

Taiwan's defence ministry said on Thursday that China had conducted three days of guided-missile, cannon and other military tests in the sea 136 km north of Taiwan.

As clues for trading incentives, Tokyo dealers have started to focus on interest rate direction both in the US and Germany ahead of policy-setting meetings next week.

Although prospects for concerted credit easings by both nations are slim, some dealers said any cut in German interest rates without a US rate cut may boost the dollar up to 1.49-1.5 marks. A bank dealer said dollar gains above 1.48 mark may be slowed by selling interest by European corporations and central banks.

DEPOSIT RATES

SINGAPORE: Asian dollar deposits were little changed in lacklusture trade, dealers said.

They said most traders were sidelined ahead of tonight's 1400 GMT release of the University of Michigan consumer sentiment survey for August, which is forecast to be around 94.3 compared with 94.4 reported in July.

"Rates were a little bit softer this morning. But there was no fresh news today and most people are waiting for tonight's Michigan sentiment survy figures for more clues to the state of the (US) economy and inflation," a local dealer said.

In day-to-day rates, weekend eased 1/16 percentage point to 5-13/16 5-11/16 percent, Monday/Tuesday was unchanged from Thursday's 5-7/8 5-3/4 percent and week-fixed eased 1/16 point to 5-7/8 5-3/4 percent.

Among longer dates, one-month eased 1/16 point to 6 5-7/8 percent, three-month was unchanged from Thursday's 6 5-7/9, nine-month eased 1/16 point to 6 5-7/8 and twelve-month was unchanged at 6-1/8 6 percent-Reuter