The dollar moved tightly above ¥121 in Tokyo trading on Tuesday, as currency players retreated to the sidelines amid the dearth of fresh trading incentives.
At 5 p.m., the dollar was at ¥121.11-12, down from ¥121.28-29 at the same time Monday. The euro was at $1.0919-0920, up from $1.0869-0870, and at ¥132.24-26, up from ¥131.84-84.
The greenback held firm around ¥121.25 in the early morning, after briefly falling below ¥121 in New York trading overnight. The dollar’s downside proved solid, bolstered by active buybacks at levels below ¥121, but there were no fresh trading incentives to push the U.S. currency higher, market sources said.
The dollar was mostly stuck in a narrow range around ¥121.20-30 during Tokyo hours, moving in line with the benchmark 225-issue Nikkei stock average, which fluctuated around the previous day’s closing levels.
European players sold dollars somewhat in late hours, but the U.S. unit’s downswing was limited.
“Ahead of Japan’s national holiday (on Wednesday) and the Christmas vacation, few investors dared to take fresh positions,” an official at a currency broker said.
The dollar-yen pair is expected to lack a clear direction in transactions dominated by position-adjusting moves, following the release later on Tuesday of revised U.S. gross domestic product data for July-September.
“With overseas players already away for Christmas holidays, the market is unlikely to show any notable reaction to the data,” an official of a major Japanese bank said.
The market’s focus will be on a press conference by Bank of Japan Gov. Haruhiko Kuroda scheduled for Thursday. Market participants are closely watching whether Kuroda can give convincing explanations about the BOJ’s supplementary steps to the current monetary easing policy announced Friday, market sources said.