The dollar temporarily tumbled below ¥101.50 in Tokyo trading Thursday as the yen attracted brisk purchases for its safe-haven status in the wake of the stock tumble.
Later in London trading, the dollar briefly slipped below ¥101 for the first time in about two weeks.
At 5 p.m. in Tokyo, the dollar stood at ¥101.92-94, down from ¥102.79-80 at the same time Wednesday. The euro was at $1.2863-2865, down from $1.2934-2935, and at ¥131.12-15, down from ¥132.95-97.
The dollar climbed above ¥103.50 in morning trading, helped by U.S. Federal Reserve Chairman Ben Bernanke’s congressional testimony Wednesday that indicated the U.S. central bank may scale down its quantitative easing in the foreseeable future.
His remarks before the Joint Economic Committee of Congress came as a surprise as many market players had expected him to maintain his cautious stance on reducing stimulus, market sources said.
“A sustainable recovery in the U.S. economy will be needed” for the Fed to actually scale back its asset purchases, said an economist of a bank-affiliated think tank. “The biggest focus is on whether upcoming economic data would indicate an improvement in the U.S. corporate sector, which is relatively weaker than the employment situation.”
The U.S. currency was gradually weighed down by selling from individual investors aimed at taking profits on the dollar’s recent upsurge, according to an official of a foreign exchange broker.
A wave of selling hit the dollar in the afternoon after the Nikkei average plunged more than 7 percent.