The dollar fell below ¥100.30 in Tokyo on Monday, bruised by falls in stock prices in and outside Japan.
At 5 p.m., the dollar was quoted at ¥100.20-22, down from ¥100.61-63 at the same time Friday.
The euro stood at $1.3029-3030, against $1.3031-3033, and at ¥130.58-58, down from ¥131.13-21.
The dollar grew sluggish versus the yen in the afternoon after showing some strength in the morning on the back of real demand-backed purchases, traders said.
The U.S. currency moved in tandem with Japanese stock prices, which expanded their losses in the afternoon, as well as with Asian stock markets that also stumbled.
Other dollar-bearish factors included weaker results of China’s nonmanufacturing purchasing managers’ index for May and Australia’s retail sales for April, according to the traders.
Dollar-yen rates “are going back and forth,” a currency market broker said, noting that the U.S. currency is seeing selling pressure build up at highs.
Many players are stepping up moves to adjust dollar-long positions in light of the volatile Japanese and U.S. stock markets, market sources said.
But “the U.S. economic recovery seems to be gaining momentum,” a currency market analyst said, citing recent brisk economic data such as the Chicago-area purchasing managers’ index for May, released Friday.
The U.S. equity market seems to be entering an adjustment phase as many players are increasingly braced for the possibility of the Federal Reserve scaling back its bond purchases, a market source said.
But the source also said dollar investors shouldn’t take stock price moves too seriously.
“Even if the dollar falls below the line (of ¥100), it is likely to draw brisk buying on dips,” a major Japanese bank official added.
Once risk-aversion selling loses momentum, a dollar-bullish mood is likely to be back along with a shift in the market’s focus to a widening interest rate gap between Japan and the United States, said an official at a bank-linked brokerage house.