Dollar Lower Against Yen
TOKYO (AP) _ The U.S. dollar again dipped to a record low on the Tokyo Foreign Exchange market Tuesday, opening at 134.25 yen. It had closed Monday at 135 yen.
The opening rate was the dollar’s lowest against the yen since the modern exchange rate system was established in the late 1940s.
Its previous low was set Friday, when the U.S. currency was momentarily quoted at 134.40 yen.
Dealers said people in the market were disappointed by the failure of central bank chiefs meeting in Basel, Switzerland, to produce concrete measures to prop up the dollar.
During the Bank of International Settlements talks, central bankers from the United States, Japan, West Germany and eight other western industrial nations reaffirmed a commitment to keep financial markets running smoothly in the wake of the October stock market crash, but no new policy initiatives were announced.
″We expected some kind of coordinated policy from the ... meeting, but there were no concrete measures″ to check the dollar’s downward trend, said Masaharu Takenaka, a senior trader for the Bank of Tokyo.
He said the failure of the Basel meeting to yield a financial policy meant that West Germany and the United States probably would proceed with independent monetary policies.
The United States may try to stabilize stock prices even at the risk of allowing the dollar to fall further, while West Germany basically would try to control its money supply, Takenaka said.
At the outset of Tuesday’s trading, Japan’s central bank stepped into the market, purchasing a small amount of dollars for yen that temporarily boosted the U.S. currency, market sources said.
But in mid-morning trading, the dollar dropped to the 133.95 yen level, another record low.
The Bank of Japan does not comment on its market intervention.
Meanwhile, Finance Minister Kiichi Miyazawa told reporters that Japan will continue to intervene in currency markets to prop up the dollar. He said current dollar-selling was sparked by the absence of a U.S. deficit-cutting package.
Takenaka said the market was expecting ″some kind of concrete measures by Nov. 20″ from the talks between the Reagan administration and congressional leaders to reduce America’s huge budget deficit.