* Nikkei newspaper says Obama to name Summers next Fed chief
* Despite doubts on source, report boosts dollar - trader
* Markets focused on next week's Fed meeting
* U.S. retail sales data due at 1230 GMT
By Anooja Debnath
LONDON, Sept 13 The dollar rose broadly on
Friday, as uncertainty over future U.S. monetary policy was
fanned by a Japanese newspaper report saying Lawrence Summers
would soon be named to head the Federal Reserve.
Business daily Nikkei said the White House was expected to
announce the decision after the Fed's Sept. 17-18 meeting, at
which it is expected to trim its bond buying.
Former treasury secretary Summers is seen as less dovish
than Janet Yellen, the other leading candidate to replace Ben
Bernanke, whose term ends next January.
Traders said although some doubted the credibility of the
source, the report gave the dollar and U.S. Treasury yields an
"This morning the Summers story was the main event...markets
know Yellen is very dovish, so any candidate other than her
would be dollar positive," said Lutz Karpowitz, currency analyst
He added that the effect was not very pronounced as
investors were cautious ahead of the Fed meeting next week,
where they would likely be more clarity on its 'tapering' plans.
The dollar was up 0.1 percent on the day against a basket of
currencies, with its index at 81.612, edging away from a
two-week low of 81.356 set on Thursday.
The 10-year Treasury yield hit a peak around 2.957 percent
, up from Thursday's close of 2.905 percent.
U.S. retail sales and sentiment data due later on Friday
could provide an extra boost to the dollar if they come in above
But the dollar was still on track for its first week of
losses after four straight weeks of gains.
Following last Friday's weaker than expected U.S. non-farm
payrolls data, many traders and analysts expect the central bank
to announce a modest $10 billion reduction in its $85 billion
monthly bond-buying programme.
"Fed tapering is expected next week but the amount they are
expected to reduce has been decreasing and this has weighed on
the dollar," Commerzbank's Karpowitz said.
The dollar was last up 0.2 percent at 99.72 yen, off
an intraday high of 99.98 yen hit after the Nikkei report.
Earlier, the dollar rose against the yen after the
government raised its view on the economy for the seventh time
this year because of rising capital expenditure.
"In my view, anything that seems to edge away from deflation
pressures is more negative for the yen," said Mitul Kotecha,
head of global foreign exchange strategy for Credit Agricole.
Analysts said, although the dollar has recently struggled to
stay above 100 yen the uptrend was still intact.
"Dollar/yen will trade back to above the 100 level. Recently
it has stalled near it but in the coming months we will see more
yen-selling," said Neil Jones, head of hedge fund FX sales at
Mizuho, who expects the dollar at 110 yen by early next year.
The euro edged lower against a broadly firmer dollar,
with the single currency easing 0.1 percent to $1.3287.