The dollar rose to its highest level against the Japanese yen in a month yesterday, breaking back through the psychologically important 100-yen level and extending a bounce that began more than a week ago.
Analysts said the main reason for the dollar's rally yesterday was a rumor that the long-standing bilateral trade dispute between the United States and Japan would be resolved by July 31, the deadline Washington has set for deciding whether to take steps toward trade sanctions.
But in the next breath, foreign exchange traders cautioned that there was more sum than substance to the dollar's performance. The day's gains, they pointed out, came during a session when trading was quite light, which means the dollar's surge may have been exaggerated.
"I don't think anyone made any portfolio changes today," Richard E. Witten, a partner at Goldman, Sachs & Co., said. "Big numbers were not being thrown around. There were trades in the $10 million and $20 million range, not in the hundreds of millions or billions."
With the trade deadline looming and an important economic report scheduled to be released this morning, Mr. Witten and other traders said that traders and investors did not want to speculate against the dollar. The Commerce Department this morning will release the first report on the pace of economic growth in the second quarter.
In late New York trading, the dollar was quoted at 100.10 yen, up 1.5 percent from Wednesday's closing quote of 98.45 yen. In yen terms, the dollar has not been this strong since June 28.
The dollar also rose against the German mark yesterday, to 1.5920 marks, from 1.5749 marks on Wednesday.