Clinton scandal to fuel move towards strengthening yen

The US dollar is likely to fall further against the yen this week, as allegations of a new scandal involving US President Bill Clinton discourage investor confidence.

The dollar-selling mood will probably be compounded by growing expectations of additional economic stimulus measures by the Japanese Government, dealers said.

Dealers believe that the dollar will move in the 124-130 yen range.

Market players will monitor the US scandal, in which it is alleged that Mr Clinton asked a young White House intern to lie to investigators about an affair he had with her.

'The scandal will inevitably have a negative impact on the dollar,' said one dealer at a Japanese bank.

Meanwhile, market players are now confident about purchasing the yen due to growing hopes that the Japanese Government will implement further economic stimulus measures to bolster the economy.

Referring to the recent rebound of the key yield of long-term government bonds, Hitoshi Imamura, currency dealer at Nippon Credit Bank, said the recovery of the Japanese economy had been mildly factored into Tokyo financial markets.