The dollar was firmer above ¥103 in Tokyo trading Tuesday, helped by an improved outlook for the U.S. and Chinese economies.
At 5 p.m., the dollar stood at ¥103.30-32, up from ¥102.96-98 at the same time Monday. The euro was at $1.3794-3795, up from $1.3758-3758, and at ¥142.50-53, up from ¥141.65-68.
The dollar was supported in morning trading by Chinese government data that showed the country’s manufacturing activity improved in March from the previous month.
In the afternoon, players retreated to the sidelines due to a slide in the Nikkei average and ahead of key economic data releases in the United States and Europe later in the day.
The dollar-yen pair showed little reaction to the Bank of Japan’s “tankan” quarterly survey for March that showed the diffusion index for large manufacturers’ business outlook toward June stood at plus 8, weaker than the market’s consensus forecast.
“Major fund flows by institutional investors have not been observed in general so far this week,” an official at a foreign exchange broker said.
This is because a wait-and-see mood is strong ahead of the European Central Bank’s policy meeting Thursday and the release Friday of a crucial U.S. employment report for March, the official said.
“While there is persistent hope for a U.S. economic recovery, speculation about the Federal Reserve’s interest rate hike has receded” after Fed Chairwoman Janet Yellen said monetary easing is still needed for some time, said an official of a major foreign bank.