The dollar rose above ¥118 in Tokyo trading on Wednesday, lifted by higher stock prices in Japan and abroad.
At 5 p.m., the dollar was at ¥118.21-21, up from ¥117.38-39 at the same time Tuesday. The euro was at $1.0815-0816, down from $1.0892-0892, and at ¥127.86-87, almost unchanged from ¥127.87-88.
The dollar attracted purchases on the back of rising stocks in Europe, the United States and Japan.
The U.S. currency rose above ¥118.30 briefly after Chinese data showed better than expected export and import numbers for December, market sources said.
Investors also welcomed stability in the yuan that apparently came after China’s central bank set a guidance rate for the currency almost unchanged from Tuesday, market sources said.
“Currency players moved to unwind dollar-short positions,” an official at a foreign exchange broker said.
But the dollar failed to extend gains as China’s benchmark Shanghai stock index closed lower.
The dollar becomes top-heavy when it rises above ¥118, traders said.
“Market players are in no mood to step up dollar buying amid persistent concerns about low crude oil prices and weakness in Shanghai stocks,” a trust bank official said.
“Due to lingering worries over the Chinese economy, the dollar has a limited room to gain further ground,” a Japanese bank official said.