Yen rally sputters despite unprecedented interest from speculators

Interest rates and purchasing power signal potential for renewed sell-off

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The momentum of the yen's appreciation is being tempered by demand for dollars. (Photo by Akira Kodaka)

RYO SAEKI

TOKYO -- The yen is struggling to maintain upward momentum after strengthening past 150 to the dollar for the first time in two months last week, as demand for the greenback outpaces record purchases by speculators.

"In the medium term, the rate will return to around 155 to 160 yen to the dollar," a foreign exchange dealer said. Many market watchers also say the yen's current strength is temporary.

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