The dollar shot past the ¥100 mark for the first time in about a month in early Wednesday trading in Tokyo but lost steam on profit-taking.
At 5 p.m., the dollar stood at ¥100.11-13, still up from ¥99.69-70 at the same time Tuesday. Later, the greenback slipped below ¥100.
The euro was at $1.2927-2929 at 5 p.m., down from $1.3056-3058, and at ¥129.42-43, down from ¥130.13-23.
The dollar moved on a firm note well above ¥100.50 in early trading after retaking ¥100 overnight in overseas trading thanks to rosy U.S. economic data, including manufacturing orders for May.
The currency rose to as high as around ¥100.80 briefly, though it faced some selling from Japanese exporters.
After hovering above ¥100.50 for most of the day, the dollar suddenly gave up its gains in late trading as profit-taking increased in line with the participation of European players, market sources said.
The euro was sold versus the yen amid growing concerns about the political situation in Portugal, and this in turn triggered dollar sales against the Japanese currency, some traders said.
The dollar has recently tended to draw buying because hopes for U.S. economic recovery are mounting on the back of rosy economic data, an official at a major Japanese bank said.
Meanwhile, an official at a bank-affiliated brokerage said emerging expectations for an early start of the U.S. Federal Reserve’s scaling-back of its current quantitative easing policy could pressure stock prices.
If stock prices continue to come under selling pressure, the dollar’s upside will also be capped, the official added.