The dollar barely managed to stay above ¥102 in late Tokyo trading Thursday after hovering just below that level earlier in the day, as solid Japanese gross domestic product data for January-March failed to set a clear trend.
At 5 p.m., the dollar stood at ¥102.02-02, slightly down from ¥102.10-11 at the same time Wednesday. The euro was at $1.3672-3673, down from $1.3716-3716, and at ¥139.48-51, down from ¥140.04-07.
The dollar’s late advance came as the euro met with renewed selling versus the dollar, due partly to caution ahead of the release of eurozone GDP data for January-March, traders said.
The government reported in the morning that Japan’s real-term GDP grew 1.5 percent quarter on quarter, stronger than market expectations for a 1.0 percent rise. The quarterly growth translated into an annualized rate of 5.9 percent.
Following the upbeat data, the dollar initially attracted purchases versus the yen in expectations of higher Tokyo stock prices, but soon fell to as low as around ¥101.65 as the TSE got off to a weak start on the heels of Wall Street’s hefty losses Wednesday.
Investors felt the GDP growth was not that surprising as the data suggested it was mainly attributed to last-minute demand ahead of the consumption tax hike on April 1, an official at a foreign exchange brokerage house said.
The data rather suggested the possibility of a sharper than expected fall in domestic demand following the tax hike, after the last-minute demand proved to be stronger than anticipated, an official at a Japanese securities firm noted.