Monday April 11, 2005 - 08:29:37 GMT
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The dollar was little moved on Monday, recouping some of its early losses against the yen after data showed Japan posted a larger-than-expected current account surplus for February.
Trading remained slow in Tokyo, with dealers looking forward to the release of U.S. trade data and minutes from the Federal Reserve's policy meeting last month, both due on Tuesday, which could give the dollar some direction.
At 0539 GMT, the dollar was fetching about 108.40 yen, compared with 108.23 in late U.S. trade on Friday.
The euro stayed flat at $1.2925.
The dollar slipped from the day's high of 108.52 yen after data showed Japan's current account surplus narrowed 1.5 percent in February from a year earlier to 2.1174 trillion yen ($19.53 billion).
Market forecasts had centred on a surplus of 1.931 trillion yen, a fall of 10 percent.
The dollar hit a five-month high of 108.90 yen last Tuesday on chances of higher U.S. interest rates but since then has failed to make headway, frustrating dollar bulls.
Some dollar bears say Tuesday's U.S. trade data could rekindle worries over its deficits and reverse the dollar's recovery this year.
Economists expect the U.S. trade deficit to have widened to $59.0 billion in February, which would make it the second-highest on record behind the $59.4 billion hit last November, and up from $58.27 billion in January.
U.S. data on speculators' positions also indicated downside risk for the dollar against the yen.
Speculators in IMM yen futures had the biggest net short positions since January 2001 during the trading week ended last Tuesday, data from the Commodity Futures Trading Commission showed on Friday.
That suggests speculators could rush to buy back the yen if it clearly rebounds.
Traders saw no major immediate impact from a fairly strong earthquake that hit the Tokyo region early on Monday. The quake affected some transport but no casualties were reported.
Tokyo traders were more concerned that anti-Japan protests in China over the weekend could hurt growing economic ties between Japan and China.
On Saturday, thousands of protesters in Beijing -- angry at what they see as Japan's whitewashing of atrocities during World War Two -- threw rocks at the Japanese embassy and other buildings including Bank of Tokyo-Mitsubishi's branch in the city. Demonstrations also took place in several other cities.
Some traders think rising political tensions between Asia's two biggest economies could prompt foreign investors to pull out of Japanese shares.
@09h30 GMT: GB March PPI
@09h30 GMT: GB Febuary Trade Balance
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