The dollar soared to a six-month high a tad below ¥102 in Tokyo trading Monday, with investors willing to take more risks on the back of global stock price rises.
At 5 p.m., the dollar was quoted at ¥101.74-76, up from ¥100.98-101.00 at the same time Friday. The euro was at $1.3539-3540, up from $1.3483-3486, and at ¥137.76-83, up from ¥136.20-21.
The euro surged to levels around ¥138 to rewrite its four-year high, following a stronger than expected reading in the German Ifo Business Climate Index for November released Friday, traders said.
The dollar climbed against the yen following last week’s sharp rise, as the Nikkei average rose to a new six-month closing high Monday after the U.S. Dow Jones industrial average rewrote its record high Friday.
The greenback jumped to near ¥101.80 in the morning after moving around ¥101.20 earlier. In the afternoon, it moderately extended gains but stopped short of topping the ¥102 mark.
“Dollar buying against the yen is increasing mainly among overseas traders,” an official at a bank-affiliated securities firm said.
The U.S. currency was supported by strong demand from Japanese importers and by expectations that the U.S. Federal Reserve will soon start to scale back its quantitative easing, traders said.
Yen selling was also prompted by Bank of Japan Gov. Haruhiko Kuroda’s remarks that the BOJ will take necessary steps while watching both upside and downside risks in the economy.
Meanwhile, the Iran nuclear deal “may be putting the market in a somewhat risk-on mode and it seems that market participants regard it as a support” for the dollar against the safe-haven yen, said Yuzo Sakai of Tokyo Forex & Ueda Harlow.
Reflecting increased risk appetite among investors, a U.S. Commodity Futures Trading Commission report showed late last week that yen-short positions in currency futures as of Nov. 19 hit the highest level since 2007.
The dollar-yen is expected to be susceptible to domestic stock price moves this week, with few major U.S. economic events scheduled until the Dec. 6 release of government jobs data for November, a bank official said.