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Dollar claws back in Asia

TOKYO, Sep 15 – The dollar rebounded slightly in Asian trade on Tuesday, getting a modest boost against the yen after outgoing Finance Minister Kaoru Yosano said rapid swings in currency rates were undesirable.

The dollar rose to 91.10 yen in Tokyo afternoon trade, up from 90.92 in New York late on Monday. The euro slipped to 1.4610 dollars after 1.4619 while gaining to 133.12 yen from 132.94.

The greenback rallied away from seven-month lows against the Japanese currency after Yosano said a stronger yen would eventually undermine the competitiveness of Japanese exporters on global markets.

"It\’s hard to say what level (of the yen) is appropriate, but rapid currency moves are undesirable anyway," he told reporters.

But the effect of the remark was limited as the "market is looking past Yosano now," Hideki Amikura, senior forex dealer at Nomura Trust and Banking, told Dow Jones Newswires.

Investors were watching to see who would be named Japan\’s next finance minister by incoming premier Yukio Hatoyama, whose centre-left government is due to take power on Wednesday.

Local media reported 77-year-old former bureaucrat Hiroshisa Fujii was in line for the key job, which he held once before briefly in the early 1990s.

Fujii has said that in principle the government should refrain from intervening in the currency market to curb the strength of the yen and protect the country\’s exporters.

Japan has not intervened since March 2004, allowing the yen to find its own level against the dollar.

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The euro eased back from Monday\’s nine-month high against the dollar, but dealers said it could soon resume its upswing because low US bond yields are reducing the appeal of the greenback.

"The euro is surging in a reaction to the weak dollar," said Hideaki Inoue, chief manager at forex trading at Mitsubishi UFJ Trust and Banking Corp. "The currency is likely to test new highs."

Against Asian currencies, the dollar fell to 1,218.45 South Korean won from 1,225.05 on Monday, to 1.4220 Singapore dollars from 1.4258 and to 32.62 Taiwan dollars from 32.66.

It dropped to 9,907.50 Indonesian rupiah from 9,955.00, to 48.33 Philippine pesos from 48.41, and to 33.92 Thai baht from 33.96.

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