Dollar is getting pounded against the yen tonight. Last I looked, spot gold was up .95 . Wonder if it can follow through in New York.
.c Kyodo News Service
TOKYO, June 9 (Kyodo) - The U.S. dollar sank to the 111 yen level just after noon Monday in Tokyo, for the first time since May 20, on wariness about possible resurgence of trade friction between Japan and the United States.
The dollar was changing hands at 112.35-38 yen at noon, down from 113.18-21 yen at 9 a.m. and from late Friday's quote of 114.25-35 yen in New York. The high for the morning was 114.20 yen.
Dealers said comments Friday by U.S. Treasury Secretary Robert Rubin and Trade Representative Charlene Barshefsky expressing concern about the growing trade deficit with Japan set off dollar-selling.
The slippage in the German mark against the yen below the recent support level of 66.30 yen to around the mid-65 yen level at noon also weighed on the dollar, they said.
Dealers said the dollar dipped below the recent low of 111.98 yen to its lowest level since late November last year, in thin trading.
The market speculates the U.S. will raise trade issues with Japan at the summit of the Group of Seven countries and Russia starting June 20 in Denver, Colorado, they said.
''The U.S. pressure over Japan's trade surplus seems bigger than expected,'' said Eiji Takane, deputy chief for foreign exchange at Asahi Bank.
Besides, ''There is no factor to buy dollars at present, except for the fall in Japan's long-term interest rates,'' he said.
Although the key 10-year Japanese government bond yielded 2.480%, down 0.025 percentage point, ''The market's eyes have turned to the trade issue rather than the gap in interest rates,'' Takane said.
The dollar's plunge at the end of last week in New York below the recent support line of 115 yen forced players to sell it to cut losses, dealers said.
''Japanese exporters who had been poised to sell the dollar at the 116 yen level last week are selling it this morning,'' said Masahiro Yamaguchi, international treasury manager at Tokai Bank.
Dealers said the dollar may plummet further if Japanese monetary officials say nothing to warn against the yen's rise, as the absence so far of such comments suggests they will tolerate a further fall of the dollar.
Against the German mark, the dollar was quoted at 1.7165-7170 marks at noon in Tokyo, down from 1.7195-7198 marks at 9 a.m. and from 1.7240-7250 marks late Friday in New York.
AP-NY-06-08-97 2349EDT
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