The dollar fell below ¥102.50 in Tokyo trading late Wednesday, chiefly weighed down by position-adjustment selling.
At 5 p.m., the dollar stood at ¥102.48-49, down from ¥103.24-26 at the same time Tuesday. The euro was at $1.3766-3768, up from $1.3748-3750, and at ¥141.10-11, down from ¥141.95-97.
In the morning, the dollar attracted purchases from Japanese importers and briefly rose above ¥102.90. But the dollar came under selling pressure after the Nikkei average lost more than 200 points at one point in the afternoon.
Still it resisted falling further, with its downside underpinned by buybacks.
After European investors joined trading in late hours, however, the dollar slipped to around ¥102.40 temporarily due to selling aimed at adjusting positions.
Such selling has been seen since Tuesday. “Selling at levels around ¥103.50 was strong,” an official at a foreign exchange margin trading service firm said, referring to the dollar’s failure to top ¥103.50 in Tokyo on Tuesday.
The dollar is in a correction after a surge triggered by stronger than expected U.S. jobs data for November, released Friday, pressured by falls in U.S. and Japanese stock prices as well as by a drop in U.S. long-term interest rates, market sources said.
“In order to chase higher ground, the dollar needs to consolidate its footing at current levels for the time being,” an official of a major Japanese bank said.
According to market sources, Japanese individual investors are moving to unwind dollar-long positions and turn dollar-short. “Such a shift in investor positions is expected to cap the dollar’s topside for now,” an official at a major foreign exchange broker said.