NEW YORK -- The dollar made its biggest one-day gain against the yen in 11 months and rose against other currencies yesterday amid speculation that industrial nations may take steps to bolster the currency at a meeting Tuesday.
Finance ministers from the Group of Seven industrialized nations are scheduled to meet in Washington. The G-7 countries worked together in 1985 to weaken the dollar and then again in 1987 to halt the dollar's decline.
The U.S. currency's gains "are all a run-up to the G-7," said Kevin Lawrie, foreign exchange manager at Mellon Bank in Pittsburgh. "There's speculation that there might be a communique released regarding the dollar."
The dollar was last quoted at 83.16 yen, up from 81.35 yen late yesterday in New York.
It was last at 1.3837 marks, up from 1.3715 marks late Wednesday.
Since Wednesday, when it hit a record low of 79.75 yen, the dollar has advanced 4.2 percent against the yen. The last time the dollar gained as much against the yen in a single day was on May 10, 1994, when it rose 1.75 yen.
In early trading today in Japan, the dollar added to its gains, rising to 83.31 yen by late morning.
While many investors are dubious that the G-7 will devise concrete proposals to help the dollar, traders are wary of being caught wrong-footed if the G-7 does take action.
A Japanese official who requested anonymity said Japan will urge other members of the G-7 to agree to measures to curb the yen's recent climb against the dollar.
The members of the G-7 are the United States, Japan, Germany, France, the United Kingdom, Italy and Canada.