960408

Greenback softer

against yen in Tokyo

TOKYO: The dollar retreated against the mark on profit-taking by overseas operators in subdued Monday afternoon trade after softening against the yen because of sales by Japanese exporters and U.S. funds in the morning.

Market direction was mixed, with some saying that concerns about the North Korea situation sustained the dollar. Others said uncertainty over U.S. stocks dampened dollar buying.

A bank dealer in Tokyo said the dollar could be vulnerable to falls in line with sagging U.S. bond market conditions, which could also put downward pressure on the U.S. stock market.

The U.S. Treasury market was battered heavily on Friday on U.S. data which showed a rise of 140,000 in non-farm jobs in March, more than twice the 60,000 forecast by economists and the second strong increase in as many months.

Because the U.S. stock market was closed last Friday, Monday's trade will be its first chance to respond to the jobs data, making it a key topic of concern, dealers said.

"The focus is on tonight's Wall Street. If U.S. stocks are sold off, then the dollar will also come under pressure," said Hank Note, chief dealer at Sumitomo Bank.

Koichi Kubo, senior chief dealer at Dai-Ichi Kangyo Bank, said U.S. stocks may ease at the outset but could recover by late trade there because the robust economic data on Friday would not lead to an immediate U.S. credit tightening.

Kubo said renewed concerns about the North Korea situation could tend to keep the basis for the yen's weakness, given the possibility that the situations there will worsen.

Tokyo dealers said activity was dampened in afternoon trade ahead of market holidays in much of Europe.

Dai-Ichi Kangyo's Kubo said the dollar is likely to move in a range of 106.80 to 108.30 yen this week.

"The whole world is still interested in buying dollars, but the long positions have been gathered for quite a long time already," a U.S. bank dealer in Singapore. "Despite the good news that keeps coming out, dollar is not reacting positively. It's a tug of war, especially against the mark," he added.

Dollar/mark saw some profit-taking on top at around 1.4830/40 marks, dealers in Singapore said. The U.S. bank dealer said the dollar/mark rate could fall to 1.4780/90 marks before New York comes in. A Tokyo dealer said stop-loss dollar sales may be placed at 1.4750 marks.-Reuter