The dollar rose above ¥99.50 in Tokyo trading Thursday, as minutes of the U.S. Federal Reserve’s policy meeting in March gave rise to expectations for wider interest rate gaps between Japan and the United States.
But its attempt to climb above the psychologically important ¥100 line was frustrated by profit-taking, sales by speculators and sell orders for commercial demand.
At 5 p.m., the dollar stood at ¥99.62-63, up from ¥99.34-36 at the same time Wednesday. The euro was at ¥130.27-30, up from ¥130.18-21, and at $1.3075-3083, down from $1.3104-3106.
The dollar held firm around ¥99.80 in early Tokyo trading, after rising as high as ¥99.88 in New York overnight on the back of speculation that the Fed may scale down its quantitative easing before long and Japan-U.S. interest rate differentials would expand.
The minutes of the Fed’s policy-setting Federal Open Market Committee meeting in March, released Wednesday, showed that many policymakers called for reducing the pace of the Fed’s asset purchases under its quantitative easing program or ending the program later this year.
The effects of the Bank of Japan’s bold monetary easing measures decided earlier this month also helped lift the dollar to levels close to ¥100, a level last breached about four years ago.
But the greenback gradually headed lower to around ¥99.40 before noon in Tokyo, as market players moved to lock in profits.
In the afternoon, the dollar showed resilience after the BOJ conducted an open market operation of injecting ¥1.5 trillion into the banking system.
It also attracted some buybacks, helped by buoyant Tokyo stocks.