The yen rises on the wings of the rupiah

The yen rises on the wings of the rupiah

LONDON (AFP): The yen rose early yesterday in the light of overnight gains in South East Asian currencies, notably the Indonesian rupiah, and the pound fell after the publication of lower-than-expected inflation data.

The dollar fell to 123.27 yen from 124.08 from 123.53 in Tokyo. Against the mark, the dollar fell to 1.8109 marks from 1.8161.

Sterling fell to 2.9433 marks from 2.9570 moments before the British price data was released and 2.9688 late Monday. Against the dollar, the pound fell to 1.6260 dollars from 1.6313 just before the figures were released and 1. 6347 dollars late on Monday.

A currency strategist at Barclays Capital trading house, Jane Foley, said that a "recovery in most Asian markets, and particularly the Indonesian rupiah, buoyed sentiment and added support to the yen and Australian dollar."

The rupiah rose in the light of comments made by Indonesian President Soeharto that were interpreted as meaning that the rupiah might be pegged to the dollar in the same way as the Hong Kong dollar, in a bid to stabilize the national economy.

The rupiah also gained from a rise in minimum capital requirements held by Indonesian banks.

"Recovery in Asia will help the outlook for Japan and Australia," Foley said.

The strategist added that "the yen will remain well supported ahead of the G-7 (finance ministers and central bank governors meeting here on Feb. 21) and a package of measures designed to boost the Japanese economy."

The other European currencies showed little sign of change against the mark.

The dollar was being traded at 1.8109 marks from 1.8161, 123.27 yen from 124.08, 1.4604 Swiss francs from 1.4645, and 6.0677 French francs from 6.0883.

The mark was being traded at 3.3531 French francs from 3.3538, 988 lira (987), 84.75 pesetas (unchanged), 0.8067 Swiss francs (0.8062), and 68.08 yen (68.35).

Sterling was being traded at 1.6260 dollars (1.6347), 2.9433 marks (2. 9688), 200.35 yen (202.83), 2.3746 Swiss francs (2.3940), and 9.8619 French francs (9.9526).