The dollar fell below ¥103 in Tokyo trading Wednesday as stock prices lost ground in and outside Japan in a risk-aversive mood.
At 5 p.m., the dollar was quoted at ¥102.75-77, down from ¥103.05-07 at the same time Tuesday. The euro stood at $1.3569-3571, up from $1.3548-3549, and at ¥139.44-46, down from ¥139.63-64.
The dollar changed hands below ¥102.50 early in the morning in Tokyo after plunging below ¥102 in overseas trading overnight due to a drop in U.S. and European equity markets, traders said.
In addition to the drag from the “risk off” mood, the greenback was depressed by profit-taking that intensified after the currency soared to six-month highs above ¥103 on Tuesday, according to traders.
But a Japanese bank official said the dollar drew purchases at lows, including from Japanese importers. The U.S. currency “is not in for further drops,” said an official of a currency market broker.
The dollar was well bid versus the yen at lows, with many bargain-hunters waiting to come in, traders said. The day’s trading provided a good opportunity for position adjustments, a Japanese bank official said.
The dollar’s resilience came as interest rate differentials between Japan and the U.S. look to widen.
“The difference between Japanese and U.S. monetary policy stances is clear,” a foreign brokerage official said, noting the recent increase in hopes for additional monetary easing action by the Bank of Japan.
Key U.S. and European economic indicators were to be released later Wednesday. Among them was a November jobs report by Automatic Data Processing Inc., closely viewed as a precursor for the U.S. Labor Department’s jobs data due out Friday.