The dollar was firmer above ¥118 in Tokyo trading late Friday, supported by buybacks as risk aversion among currency players somewhat receded after a pause in the yuan’s fall.
At 5 p.m., the dollar stood at ¥118.24-25, up from ¥118.02-03 at the same time on Thursday. The euro was at $1.0885-0886, up from $1.0782-0783, and at ¥128.71-73, up from ¥127.28-29.
The greenback moved around ¥117.50 in the early morning after tumbling as low as around ¥117.30 in overseas trading overnight amid continued global stock sell-offs triggered by cuts in the Chinese currency’s exchange rate against the dollar by the People’s Bank of China earlier this week.
But the U.S. currency shot up close to ¥118.60 following the Chinese central bank’s midmorning announcement of a moderately higher reference rate for the yuan.
After the buying encouraged by the yuan’s rebound ran its course, the dollar lost steam as a wait-and-see mood strengthened in the currency market ahead of the release later on Friday of the U.S. government’s key jobs report for December.
In late Tokyo trading, the dollar briefly advanced above ¥118.50 again as the European markets opened.
“Excessive worries about the yuan have receded, but uncertainties remain,” an official at a foreign exchange brokerage house said.
Under the current circumstances, even a strong reading in the U.S. jobs data would unlikely unleash active dollar purchases, the official added.