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Dollar holds firm against yen

The dollar, which this week plunged into the mid-83 yen range to a new 15-year low against the Japanese currency, fetched 84.63 yen in Tokyo morning trade, almost in line with its levels in New York late Wednesday.

The euro edged up to 1.2662 dollars from 1.2655 dollars in New York and to 107.17 yen from 107.02.

Market players “cannot push with yen buying due to caution against intervention and monetary easing” by Japan, said Mizuho Corporate Bank market economist Daisuke Karakama.

“Having said that, the dollar came off its intraday high of around 84.90 yen today on speculation that intervention would be impossible right now given senior officials are travelling abroad,” Karakama said.

Bank of Japan governor Masaaki Shirakawa was to leave for the United States Thursday to attend a financial symposium while Finance Minister Yoshihiko Noda was travelling to China at the weekend for economic talks.

Japanese officials have been under pressure to show concrete plans to act against the strength of the yen, which threatens the country’s exporters, amid growing frustration over perceived inaction.

Currency rates hardly moved after Ichiro Ozawa, a controversial power broker in Japanese politics, said he will run in the ruling party’s leadership election next month, aiming to replace Prime Minister Naoto Kan.

Further weak US data disappointed the market, leaving investors to focus on Japan’s policy response to the yen’s strength.

New-home buying in the US slumped in July to the lowest level on record going back to 1963. A slight rise in demand for US manufactured durable goods was also well under expectations.

Investors were also cautious ahead of a speech Friday by Federal Reserve chairman Ben Bernanke.

“Investors are reluctant to buy the dollar above the psychological level of 85.00 yen,” a dealer at a major Japanese bank told Dow Jones Newswires.