The dollar rose above ¥101.50 in Tokyo on Thursday, backed by increasing risk appetite among investors reflecting a stronger-than-expected Chinese economic indicator.
At 5 p.m., the dollar was quoted at ¥101.54-55, up from ¥100.94-96 at the same time Wednesday. The euro was at $1.3679-3682, down from $1.3713-3716, and at ¥138.90-94, up from ¥138.45-47.
In early trading, the dollar changed hands around ¥101.40 after gaining ground in overseas trading Wednesday thanks to rises in stock prices and long-term interest rates in the United States, traders said.
The greenback added gains in the afternoon as Japanese stock prices rose further following the release of the HSBC manufacturing purchasing managers’ index for May.
A report that Japan Post Insurance Co. may increase stock purchases added fuel to equity purchases, which encouraged dollar bulls further.
The U.S. currency climbed above ¥101.70 in midafternoon trading. After the spurt, however, the dollar cut its gains.
“The dollar rose by nearly ¥1 from the previous day’s low,” a currency market broker said. “Many now find it difficult to push the dollar even higher.”
“We need to remain on guard over the course of U.S. interest rates, and we can see massive selling waiting to come in at levels just below ¥102,” an official at a major Japanese bank said.
The dollar-yen rates showed no visible reaction to the minutes of the latest Federal Reserve monetary policy meeting held April 29 and 30, because the minutes provided no surprise, according to a Japanese bank official.