The dollar traded just below ¥102.20 in Tokyo late Monday, with overseas players’ selling linked to the end of the fiscal year cutting into early gains that reflected higher stock price rises in Japan and abroad.
At 5 p.m., the dollar stood at ¥102.18-20, up from ¥102.11-12 at the same time Friday. The euro was at $1.3639-3639, up from $1.3586-3587, and at ¥139.37-39, up from ¥138.73-78.
In early trading, the dollar was solid around ¥102.50, chiefly on the back of gains in U.S. stock prices on Friday after U.S. government jobs data for January showed improvements in the jobless rate and the number of workers in the manufacturing and construction industries, market sources said.
The dollar was also buoyed by substantial gains in Tokyo stock prices.
The U.S. currency drew additional support from the election Sunday of former health minister Yoichi Masuzoe, effectively backed by Prime Minister Shinzo Abe’s Liberal Democratic Party, as Tokyo governor, a broker said.
But the dollar failed to extend gains as it was hit by profit-taking by short-term players.
Although the market welcomed a fall in the U.S. jobless rate, the employment data weren’t strong enough to push up the dollar further because the increase in nonfarm payrolls fell short of market forecasts, an official of a major Japanese bank said.
As European investors joined trading in late hours, the dollar plunged below ¥102.20 after moving around ¥102.40 earlier in the afternoon.
“Overseas players are believed to have placed sell orders, with an eye on the fiscal yearend,” a foreign bank official said.
“Although the dollar was aided by stock price gains, investors found it difficult to step up dollar purchases aggressively” as the Tokyo financial market will be closed Tuesday for National Foundation Day and due to caution before the first congressional testimony by U.S. Federal Reserve Chairwoman Janet Yellen, who was sworn in earlier this month, an official at a foreign exchange broker said.
“It will be closely watched how Yellen will discuss the pace of tapering off the Fed’s asset purchases,” an official at a bank-affiliated brokerage house said.