The dollar was firmer around ¥98 in Tokyo trading Wednesday as risk aversion among investors receded following rebounds in U.S. and Japanese stocks as well as international gold prices.
At 5 p.m., the dollar stood at ¥98.11-12, up from ¥97.74-78 at the same time Tuesday. The euro was at $1.3158-3160, up from $1.3047-3049, and at ¥129.10-12, up from ¥127.56-59.
“A sense of ease spread in the currency market due to higher Japanese and U.S. stocks, prompting dollar purchases,” a currency strategist said.
Earlier this week, weaker Chinese and U.S. economic data and the bomb attacks in Boston triggered stock selloffs while briefly driving the dollar below ¥96.
Gold futures also bounced back in the New York market overnight after plummeting about 13 percent for two market days through Monday.
After trading around ¥97.50 in early Tokyo trading Wednesday, the greenback advanced past the ¥98 line, partly pushed up by purchases from Japanese importers, traders said.
The U.S. currency was also backed by widening gaps between long-term interest rates in the United States and Japan, as Japanese government bond yields are staying relatively low on the back of aggressive monetary easing by the Bank of Japan, an official at a major bank said.
Nonetheless, the dollar’s topside was capped against the yen ahead of a meeting Thursday of Group of 20 finance ministers and central bank chiefs, where the yen’s recent rapid weakening is expected to be discussed.
“The market has calmed down for now, but a sense of caution remains due to the G-20 meeting as well as uncertainties over the future course of the U.S. and Chinese economies,” a broker said.