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Tuesday, 21 May, 2002, 23:23 GMT 00:23 UK
Dollar hits five-month low against yen
Dollar/yen
The dollar has fallen to a five-month low against the yen, raising hopes that higher exports will accelerate the US economic recovery.

The dollar had slipped below the 125-yen mark to 124.15 by the close of trade in the US on Tuesday, off earlier lows of 123.78.

The US currency's decline came amid signs of a long-awaited economic upturn in Japan and lingering uncertainty over the strength of the US rebound.

Dealers shrugged off earlier comments from Japanese officials aimed at shoring up the yen, with most analysts doubting whether Japan's central bank would intervene.

Export push

The dollar has now lost 8% of its value against the Japanese currency since the start of the year.

Analysts said the weaker dollar, which will make US exports cheaper in Japan, would help some hard-pressed US manufacturers.

US carmakers, pressured by competitively-priced Japanese imports, also stand to benefit.

"Auto companies get a little help there since imports are a big competitive problem for them," said Chuck Hill, director of research at Thomson First Call.

US metal producers, also facing stiff foreign competition, should also get some relief.

The dollar's depreciation reflects a decision by investors to pull out of the US, seen as a safe haven during global downturns, in anticipation of higher returns elsewhere.

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