The dollar traded in a narrow range around ¥100 in Tokyo trading Thursday on the back of a rise in U.S. interest rates and falls in Tokyo stock prices.
At 5 p.m., the dollar stood at ¥99.97-99, still up from ¥99.92-95 at the same time Wednesday. The euro was at $1.3224-3228, down from $1.3242-3243, and at ¥132.23-27, down from ¥132.33-36.
In overseas trading overnight, the dollar extended gains and topped ¥100, backed by a rise in U.S. long-term interest rates after the release of stronger-than-expected U.S. new home sales for June. The dollar was also aided by an improvement in the eurozone manufacturing purchasing managers’ index for July, which left market players less risk-averse and pressured the yen, regarded as a safe-haven currency, versus the dollar and the euro.
After moving around ¥100.40 in early Tokyo trading, the dollar was hit by selling aimed at locking in profits due to falls in Tokyo stock prices, traders said.
The dollar gradually extended losses and slipped below ¥100 in the afternoon. But the greenback resisted falling further, thanks to buying by Japanese importers.
“Given the rise in U.S. long-term interest rates, the dollar is unlikely to lose ground sharply against the yen,” an official at a foreign exchange broker said.
An official at a foreign exchange margin trading service firm said, “The dollar was solid against the yen despite the sluggish performance of Tokyo stocks, but the greenback seemed to be lacking vigor.”
Reflecting the widespread view that the dollar remains on an uptrend in the medium to long term, investors sees no incentives to sell the dollar for now and the U.S. currency’s downside is limited thanks to buying on dips, a bank official said.