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TOKYO: The dollar jumped against the yen and euro in Asia on Friday as stocks rebounded on hopes of a new US government plan to rescue troubled financial firms, traders said.
The dollar was changing hands at 106.13 yen in Tokyo morning trade, up from 105.37 yen in new York late Thursday.
The euro fell to 1.4261 dollars from 1.4348 dollars while staying flat at around 151.35 yen.
"The dollar gained strength after turbulence as stock markets bounced back to allow some risk taking," said Kenichi Yumoto, vice president at Societe Generale's foreign exchange sales and trading department.
Investors were waiting to hear new developments after reports that the US government was preparing to create a new entity to rescue troubled financial firms.
"There are market expectations about the programme and it is naturally a positive thing for the US authorities to opt to take concrete action," Yumoto said.
But he warned it would not be so easy to quell market worries over the global financial system.
"With concerns lingering, we can't expect new measures to have immediate, drastic effects," he said. "It is hard to imagine the market turbulence will come to an end soon."
The dollar has been under pressure for the last several days in reaction to major upheavals in the US banking and insurance sectors that have prompted controversial - and costly - US government intervention.
In its latest move, the US Federal Reserve on Thursday joined central banks around the world to provide more than US$300 billion to keep credit flowing through jittery global money markets.
Global stocks took another frantic ride Thursday with nervous New York traders mounting a strong late-day rally on hopes of the new US programme.
The Dow Jones Industrial Average vaulted 3.86 per cent while the Tokyo Stock Exchange's key Nikkei-225 index gained some three per cent by mid-morning Friday.
- AFP/yb
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