The euro fought to hold its ground against the yen and dollar in Tokyo trade Wednesday after advancing on speculation of US intervention, dealers said.
The yen lost out in the tussle, falling back against both the euro and the dollar, they said.
"The euro is gradually recovering from last week," said Bank of Tokyo-Mitsubishi dealer Kiyoshi Kuzuhara.
"Comments from government officials cautioning against a cheap euro have contributed to the rise in the currency," he said.
The euro bought $0.8625 around 2.15 p.m. (0515 GMT), barely down from $0.8636 in late New York trade and up from $0.8614 dollars in Tokyo late Tuesday.
One euro was also worth 92.23 yen at the same time, up from 91.54 in Tokyo late Tuesday.
Deputy Treasury Secretary Stuart Eizenstat helped the European currency advance in overseas trade by saying the United States was monitoring the euro from the sidelines.
He made the comment after European Central Bank president Wim Duisenberg said intervention was still a tool at the bank's disposal but that he would not discuss any action in advance.
"We think that chances of an intervention by the ECB are increasingly high and that the optimal point for the ECB to intervene is when the euro falls below the $0.85 level," DBS Bank in Singapore said in a report.
"With oil prices persistently hovering at historical high levels and the euro at record low levels, the ECB would continue to worry about rising import price pressures in euroland."
The yen weakened to 106.87 against the dollar at 2:15 p.m., compared with 106.25 yen in Tokyo late Tuesday.
Exporters helped the dollar rally against the Japanese currency.
"Against the yen, the dollar has remained fairly strong as exporters, among others, bought dollars. However, the dollar has been capped with resistance at around 107 yen," said Bank of Tokyo-Mitsubishi's Kuzuhara.— (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
