The dollar bounced back modestly in Tokyo trading Thursday after slipping below ¥102 in overseas trading amid persistent concerns over the situation in Ukraine.
At 5 p.m., the dollar stood at ¥102.24-33, still down from ¥102.52-52 at the same time Wednesday. The euro was at $1.3372-3372, almost unchanged from $1.3372-3373, and at ¥136.77-79, down from ¥137.09-10.
The yen’s safe-haven appeal has increased on growing concerns over the conflict in Ukraine, sending the dollar as low as ¥101.77 in New York trading overnight. The dollar’s downswing appeared to be accelerated by stop-loss sell orders, traders said.
U.S. Secretary of Defense Chuck Hagel said in Germany on Wednesday that the threat of Russia invading Ukraine is a “reality,” while NATO said Russia is gathering about 20,000 troops near its border with Ukraine.
In Tokyo, the greenback generally hovered just above the ¥102 threshold, supported by purchases by Japanese importers as well as the Nikkei average’s resilience after a weak opening, traders said.
In the afternoon, the U.S. currency was briefly lifted above ¥102.40 as Japanese shares rallied sharply on a media report that the Government Pension Investment Fund is planning to boost the proportion of domestic stocks in its investment asset portfolio to more than 20 percent.
“The report on the GPIF’s asset management reform was nothing new, but it came out of the blue, forcing traders to react by selling the yen,” an official at a foreign exchange brokerage house said.
Traders seemed to be cautious about chasing the dollar higher before the European Central Bank announced a policy decision and ECB President Mario Draghi held a press conference later Thursday.
The euro was weighed down by weaker than expected German industrial output data for June, released in the late afternoon, traders said.