The dollar dropped below ¥121 in Tokyo trading on Tuesday, weighed down by sluggish performance of Japanese stocks.
At 5 p.m., the dollar was at ¥120.61-61, down from ¥121.24-25 at the same time Monday. The euro was at $1.1052-1053, up from $1.0960-0961, and at ¥133.30-31, up from ¥132.89-90.
After moving around ¥121 in early trading, the dollar briefly rose to near ¥121.20.
The greenback temporarily attracted buybacks after risk-off sentiment receded thanks to a rally in crude oil prices, an official at a currency broker said. The currency also appeared to draw buying from real demand-backed players, the official said.
But the dollar gradually extended its losses in the afternoon in line with a further decline in stocks.
“With Japanese stocks staying weak, there were no factors to step up dollar purchases,” an official at another foreign exchange broker said.
“Currency traders refrained from building fresh positions” ahead of the U.S. Federal Reserve’s two-day monetary policy meeting that will start later on Tuesday,” an official at a Japanese bank said.
After European traders stepped in late hours, the dollar temporarily slipped below ¥120.70.
The dollar is unlikely to stage a sharp rebound even after the Fed’s meeting is over, because sentiment is expected to remain sluggish until crude oil prices regain stability, one market source said.