The dollar propelled upwards against the yen by late Tokyo on Friday, paring overnight losses amid concerns about the dollar's recent rapid fall.Dealers said its rise was mostly triggered by constant short-covering by interbank dealers and some sporadic importer purchases, though selling interest from exporters and some Japanese investors above 117 yen put pressure on its topside.

"Traders who had sold dollars overnight to test the downside amid talk of constant stop-loss sales near and below 115 yen were disappointed to see that the greenback only fell to 114.70 yen overnight," a city bank dealer said. He added that trading energy of such traders ebbed in Tokyo, while short-covering dominated the Asian session, pushing the dollar back up again.

In the afternoon, the dollar briefly dipped on a wire service report that a senior Bank of Japan (BOJ) official said the central bank is not concerned about the pace of the dollar's decline against the yen so far.

Dealers said the report took traders off guard and triggered some dollar sales, but the impact was limited.

Another slew of short-covering and some importer bids soon appeared and supported the US currency against the yen.

A BOJ official declined to comment on the report. On the topside, exporter offers and some hedge sales by Japanese institutional investors were expected above 117 yen, weighing on the dollar. But some dealers said the amount of those offers were not large.

In the morning, the dollar rose as high as 117.06 yen on powerful wave of short-covering, dealers said.

A trust bank dealer said some traders had bought dollars in the morning in an attempt to set off stop-loss sales near 117 yen. But since those stops have been triggered, a further jump in the dollar is unlikely, he added.

Overnight comments by US Treasury Secretary Robert Rubin that a strong dollar is in interests of the United States also supported the dollar against the yen, dealers said.

But they said most operators want to square their positions ahead of key events and data next week, such as Japan's customs-cleared trade data for April on Monday and the US Federal Open Market Committee (FOMC) meeting on Tuesday.

"Previously the market focused mostly on the (US-Japan) interest rate gap. But now Japan's trade surplus with the United States and comments from monetary officials are being closely watched for further clues," the city bank dealer said.

Finance Minister Hiroshi Mitsuzuka reiterated on Friday that the Group of Seven agreement on currencies reached in late April had filtered through to the market, and that Japan would act in a timely and appropriate manner based on this agreement.

The dollar rose against the mark, hovering above 1.70 marks for the most of the Asian session.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.