The dollar slipped back below ¥99 in Tokyo trading late Tuesday due chiefly to profit-taking, after briefly topping ¥99.50 on continued demand triggered by the Bank of Japan’s bold monetary easing regime.
After rising as high as ¥99.67 in overseas trading early in the morning, the dollar stood at ¥98.94-96 at 5 p.m., still up from ¥98.84-85 at the same time Monday. The euro was at ¥128.80-82, up from ¥128.44-47, and at $1.3017-3018, up from $1.2994-2995.
In early trading, the greenback carried over its solid tone from overnight trading overseas, where it stayed strong after rising above ¥99 for the first time in three years and 11 months thanks to the set of bold monetary easing measures announced by the BOJ last week. Later, the U.S. currency met with options-linked sales, selling by real demand-backed players and profit-taking, traders said.
“The dollar’s approach to ¥100 apparently triggered profit-taking and selling by Japanese exporters,” a major domestic bank official said.
In late hours, the dollar fell below ¥99, partly because stock prices on the Tokyo Stock Exchange shed earlier gains, market sources said.
“The pace of the yen’s recent drop was too fast,” a foreign-exchange analyst said, adding that “speculative players, including individual investors, sold the dollar to take profits.”
Still, an official at a bank-affiliated securities house said, “the dollar remains on a firm note and is expected to test ¥100 again.”
Some market participants are expecting a rise of the dollar to ¥105 and ¥110 ahead, an analyst at a major financial institution said.