The dollar temporarily fell below ¥101 on Tuesday in Tokyo for the first time in about two months as investors’ aversion to risk intensified amid unrelenting equity market turmoil.
At 5 p.m., the dollar was quoted at ¥101.08-09, down from ¥102.12-16 at the same time Monday. The euro stood at $1.3524-3524, up from $1.3479-3482, and at ¥136.71-72, down from ¥137.67-69.
The dollar remained weak in Tokyo after falling below ¥101 in New York on Monday due to sluggish U.S. economic data. The Institute for Supply Management said Monday its factory index for January slipped 5.2 points from the previous month to 51.3, the lowest in eight months.
Market players grew concerned about the course of the U.S. economy ahead of the releases of key U.S. indicators, such as Automatic Data Processing Inc.’s private-sector employment report for January on Wednesday and the Labor Department’s jobs data for January on Friday, traders said.
In the afternoon, the dollar accelerated its decline and fell below ¥100.80, hitting its lowest level since late November, as Tokyo stocks lost more ground toward the close. The Nikkei average finished just above 14,000, down more than 4 percent from the previous day.
“Speculators sold stock futures, which in turn sparked dollar falls against yen,” said an official of a bank-affiliated brokerage house.
But the dollar’s drop against the yen was relatively mild compared with the decline in Japanese stock prices, traders said.
An official of a foreign exchange margin trading service firm expects “further turbulence” in the dollar-yen sector ahead of the U.S. employment reports.