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Late slide sends dollar below ¥102

JIJI

The dollar slid below ¥102 in Tokyo trading late Wednesday, weighed down in part by weakness of European stocks, after drifting mostly in a range between ¥102.00 and ¥102.50 earlier in the day.

At 5 p.m., the dollar was quoted at ¥101.69-73, down from ¥102.24-24 at the same time Tuesday. The euro was at $1.2862-2863, down from $1.2904-2904, and at ¥130.80-82, down from ¥131.92-93.

The dollar dropped below ¥101.60 in late trading, as the Nikkei stock index futures contract fell to levels just above 14,000 at one point in off-hours trading while European stock markets opened on a weak tone. Speculative selling contributed to the dollar’s fall, brokers said.

Earlier Wednesday, the U.S. currency climbed to as high as around ¥102.50 as the Nikkei 225 advanced above 14,500 before closing moderately above 14,300.

Overall, the dollar-yen rate continued to almost synchronize with stock price fluctuations.

“The currency market is swathed in a somber mood, as traders are nervous against the backdrop of the domestic stock market’s slow rebound,” an official at a major Japanese bank said.

The stock market has been volatile since the Nikkei average late last week plummeted after soaring close to 16,000. The index briefly tumbled below 14,000 on Tuesday.

“The dollar-yen rate continued to be affected by stock price movements, unable to break the topside of its current range,” an official at a foreign exchange brokerage firm said.

The dollar’s topside against the yen was also pressured by capital repatriation flows ahead of the end of the month, traders said.