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HONG KONG: Most currencies gained slightly on the greenback as fears
over the global economy continued but the yen lost ground after
reaching a two-and-a-half year high.
The yen eased back from a 32-month high against
the US dollar in Tokyo as the world’s stock markets recovered from
volatility after the United States pressed forward a stimulus plan
aimed at heading off recession.
The Japanese currency stood at 107.63-65 to the
dollar late Friday, compared with 107.22-25 to the dollar a week
earlier.
It gradually slipped back from the week’s high
of 105.62 to the dollar on Tuesday, the yen’s highest level since
May 2005.
The US Federal Reserve’s emergency interest
rate cut of 0.75 percent on Tuesday helped soothe investors’
growing concerns about a US recession, sending the yen back to the
week’s low of 107.38 to the dollar the next day.
Then the US Congress on Thursday pressed forward
a quickly crafted stimulus plan of some $150 billion.
“Investors still cannot be perfectly convinced
that stock prices won’t tumble further, but the direction of the
market was fixed after the US Fed and government made their
positions clear,” Hachijuni Bank forex dealer Yuya Koike said on
Friday.
Hideaki Inoue, chief manager at forex trading
for Mitsubishi UFJ Trust and Banking Corp., said the yen moves
closely on the tail of stock prices.
“The direction in the market is now set for a
lower yen against the greenback,” he said, adding the yen could
slip to the 110 level in the coming week. Investors were looking
ahead to the Fed’s scheduled January 29-30 meeting amid
expectations it will cut rates again by possibly 50 basis points,
dealers said.
The market will also watch how much US President
George W. Bush will detail his economic measures when he delivers
his State of the Union speech on Monday, the business daily Nikkei
said on its Internet edition on Friday.
-- AFP
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