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Dollar resilient in Tokyo,

eyes on auction

TOKYO: The dollar was resilient against the yen, aided by the mark's easiness on expectations of a German interest rate cut and Japanese investors' dollar buying ahead of U.S. quarterly refunding later today.

"Japanese investors buying raises hopes they may take part in the U.S. refunding to some extent, strengthening dollar sentiment," said a European bank dealer in Tokyo.

A bond manager at a major securities house said Japanese investors may buy around 10 percent of securities at the U.S. Treasury's refunding, compared to a few percent in recent auctions. This could help boost the dollar against the yen.

There was also talk that dollar buying by local securities houses in the currency market might also be backed by buying by Japan's public funds, which has also been encouraged to invest abroad by last week's deregulation steps, dealers said.

Many dealers said the dollar's rise to 92 yen was well in sight but they were not yet convinced about further gains and were looking to the outcome of the auction.

"The three-year note auction is likely to draw the strongest interest from Japanese investors, but it's neceassry to watch out whether they will really buy," said Hiroshi Yabuta, chief option dealer at Yasuda Trust and Banking.

As the first leg of the biggest $42.5 billion ever in new Treasury securities sales, the Treasury will offer $18 billion in three-year notes later today.

"Still, the dollar's downside could stay well-pegged as operators here, including investors, have failed to buy dollars amid the lastest rallies to above 90 yen and were hoping to buy them on small falls," said Yasuda's Yabuta.

Japanese Prime Minister Tomiichi Murayama was expected to reshuffle his cabinet, but dealers ignored the move, considered too little and too late to revive his coalition government.

The dollar suddenly gained against the mark around midday to around 1.4125 marks on buying through Singapore. A dollar buying spree against the mark was based on growing perceptions that the Bundesbank may lower its interest rates this week.

"There's a lot of cross trading of sterling/yen, mark/yen, we see some unwinding of the long mark/yen positions and long sterling/yen, Paris/yen positions, leftover from Monday," said a dealer at Barclays Bank in Singapore.

"It's a mixed bag," said the dealer. The mark was quoted at 64.84/86 at 0731 GMT against 65.19 yen in late Tokyo trade on Monday. It fell to around 64.69 yen at midday here. SINGAPORE: Asian dollar deposits were little changed in lacklustre trade with most traders sidelined on lack of fresh incentives, dealers said.

"The market was quiet and featureless in the morning on lack of fresh factors. There's no fresh news or (U.S.) economic indicators coming out tonight and most people are waiting on the sidelines," a local dealer said.

"Some people are waiting for possible direction from this Thursday's release of the (U.S. July) producer price index and Friday's (July) retail sales and consumer price index figures," he said.

In short dates, Tuesday/Wednesday and Wednesday/Thursday were unchanged from Monday's common 5-13/16 5-11/16 percent, respectively.

Week-fixed rose 1/16 percentage point to 5-7/8 5-3/4 percent.

Among term rates, one-, three- and six-months were unchanged from Monday's common 5-15/16 5-13/16 percent, accordingly.

Twelve-months eased 1/16 point to 5-15/16 5-13/16 percent.-Reuter