Dollar Strengthens Vs. Yen

The dollar strengthened against the yen late Tuesday on a rumor sweeping through the foreign exchange market that top Japanese and U.S. officials had privately agreed on an exchange rate of 120 yen to the dollar.

“There was some very heavy buying of dollars in the market” on that rumor, said Stephen Flanagan, a senior foreign exchange trader at the New York branch of Credit Agricole.

A 120-yen level likely would alarm U.S. exporters because it hurts their ability to sell goods in Japan.

Tuesday’s rebound largely erased the dollar’s retreat against the yen Monday and pushed the dollar back toward the 112-yen level reached last week, the highest in 2-1/2 years.

Exchange Currency in Dollars Dollar in foreign currency Canada .7386 1.3540 France .1936 5.1657 Germany .6540 1.5290 Great Britain 1.5630 .6398 Italy .000659 1516.70 Japan .008957 111.65 Mexico .132644 7.5390