The dollar rose against the Japanese yen and other major currencies Friday, buoyed by the strength of the U.S. economy and expectations of an easing in U.S.-Japanese trade tensions at the meeting of Asian-Pacific leaders in Seattle.
Gold prices were mostly higher. On the New York Commodity Exchange, gold for current delivery closed at $378.00 a troy ounce, up $1.60 from Thursday. At 4 p.m. EST, Republic National Bank of New York quoted gold at $378.00 a troy ounce, up $2.20.Traders said the dollar rose against the yen because of the strengthening economy and expectations of higher U.S. interest rates. The Japanese government is more likely to cut interest rates, which may boost the weak economy but will reduce returns on yen-denominated deposits.
Traders said the market was watching President Clinton's meetings in Seattle for signs of the U.S. position on the Japanese yen. The yen strengthened this year in part on the perception that the Clinton administration wanted a stronger Japanese currency to help reduce the U.S. trade deficit.
The stronger yen, which makes Japanese exports more expensive, has hurt many Japanese companies.
Traders said the market had little reaction to the news that the U.S. trade deficit grew 8.3 percent in September, to $10.9 billion.
In Tokyo, where the trading day began, the dollar closed at 107.73 yen, up 0.73 yen from Thursday's close. Later in London, the dollar was quoted higher at 108.29 yen. In New York, the dollar closed at 108.45 yen, up from 107.29 Thursday.
In London, the British pound was quoted at $1.4715, down from $1.4785 late Thursday. In New York, the pound finished at $1.4729, cheaper than $1.4760 on Thursday.
Other dollar rates in New York compared with late Thursday: 1.7146 German marks, up from 1.7125; 1.5050 Swiss francs, up from 1.5040; 5.9465 French francs, up from 5.9325; 1,678.00 Italian lire, up from 1,672.00; and 1.3268 Canadian dollars, up from 1.3233.
Gold prices in London rose to $377.95 a troy ounce, up 85 cents from late Thursday. In Zurich the late bid price was $377.20, down 10 cents.