Dollar Opens at New Low in Tokyo Under U.S. Pressure

The dollar opened at a new low of 117.62 yen in Tokyo today, continuing its relentless slide since U.S. Treasury Secretary Lloyd Bentsen on Friday called for a stronger yen to cut Japan’s huge trade surplus with Washington.

The dollar closed at 118 28/35 yen in New York on Friday after falling to an intraday record low of 118.15 yen. The previous record intraday low was posted in Tokyo on Sept. 30.

The U.S. currency’s latest fall was sparked by Bentsen’s comment that he wanted the Japanese currency to rise even further.

Currency market players are also speculating that a meeting of the Group of Seven leading industrial nations later this month may push for a stronger yen in addition to urging Japan to boost its sluggish economy and open its markets.

Finance ministers and central bankers from the Group of Seven nations are set to meet in London on Saturday.

Morikuni Yasuhisa, a dealer at Bank of America in Tokyo, sees the dollar trading between 117.50 and 118.30 yen this morning.

“There is some psychological support for the dollar at around 118 yen, but it’s not technical support, and I don’t think it will hold,” he said.

Geoff Bowmer, vice president of foreign exchange at Bankers Trust in Sydney, said, “The only question now is at what level Japanese exporters can continue to do business.”

Japanese government officials have not ruled out yen-selling intervention. A Ministry of Finance official told Reuters on Saturday, “In general, Japan would act appropriately when the exchange rate’s volatility is too much over a short time.”