The dollar fell below ¥102.20 in Tokyo trading Monday as investors shunned risk assets on unabated concerns about emerging markets.
At 5 p.m., the dollar was quoted at ¥102.12-16, down from ¥102.50-50 at the same time Friday. The euro stood at $1.3479-3482, down from $1.3546-3547, and at ¥137.67-69, down from ¥138.84-87.
Stocks fell sharply in a “risk off” mood Monday, putting a drag on the dollar-yen rate, traders said.
The dollar fell to around ¥102 temporarily, but it also drew buying on dips and real demand-backed purchases, according to traders.
U.S. economic indicators announced last week, including personal consumption data, were generally firm. But the firmness failed to draw strong attention because emerging markets remained unstable, traders said.
“The strength of U.S. economic fundamentals is unlikely to attract attention from market participants until emerging markets regain stability,” a market watcher said.
Given the stock market’s tumble, however, the dollar’s fall was relatively limited. This was due to a wait-and-see mood ahead of a European Central Bank monetary policy meeting Thursday and the release of U.S. jobs data for January on Friday, traders said.
The euro fell below ¥138 for the first time in about two months, reflecting speculation about ECB monetary easing.
Sluggish eurozone consumer price data for January, released last week, led many market players to anticipate such actions by the ECB at the forthcoming monetary policy meeting, market sources said.
The ECB “is likely to announce some measures or other,” said an official of a foreign exchange margin trading service firm.
But an official at a major Japanese bank took the other side, saying the ECB “does not seem to have any action to take because there is little more room for the bank to lower interest rates.”
U.S. construction spending data for December was to be released later Monday, as well as the Institute for Supply Management’s manufacturing index and U.S. new auto sales, both for January. Also, U.S. Federal Reserve Vice Chair Janet Yellen will be sworn in as new Fed chief.