Supported by central bank intervention, the U.S. dollar Friday recouped some of its losses from the previous day, when it dove to its lowest closing in Tokyo against the Japanese yen, while stocks surged to another record high.
The dollar finished the week at 122.40 yen, up 0.88 yen from its 121.52-yen Thursday closing. It opened the day at 122.15 yen and traded between 122.07 and 122.60 yen during the day."Coordinated overnight intervention by central banks around the world helped push the dollar up," said King Ogino, a dealer at Goldman Sachs. He said continued dollar buying by the Bank of Japan today also served to bolster the U.S. currency.
The dollar has lost 3.48 yen in Tokyo since the start of November, and on Thursday dipped to 121.52 yen, its lowest closing since modern exchange rates were set up in the late 1940s.
The Bank of Japan intervention came after Finance Minister Kiichi Miyazawa said the central bank and other major currency countries were poised to intervene in the market should the U.S. currency continue its nose dive.
Ogino said the dollar also was buoyed by unconfirmed rumors from New York of an agreement at an alleged secret meeting Nov. 14 among high-ranking monetary authorities that the dollar should trade between 120 and 140 yen.
"The report is unconfirmed but it had good timing" to bolster the dollar, he said.
But he said the dollar was likely to take another beating against the yen next week "as speculators may test new lows for the currency."
On the Tokyo Stock Exchange, the 225-issue Nikkei Stock Average rose 103.39 points or 0.36 percent to 29,180.20. The closing level was the sixth straight record high for the index.
Dealers attributed the strong performance to confidence in Japan's economy. Friday's rally was led mainly by large capital issues, especially steels, they said.