The dollar cut early losses and rose back above ¥118 in Tokyo trading late Thursday, thanks to buybacks triggered by a rebound of Chinese stocks.
At 5 p.m., the dollar stood at ¥118.09-10, down from ¥118.21-21 at the same time Wednesday. The euro was at $1.0859-0860, up from $1.0815-0816, and at ¥128.24-25, up from ¥127.86-87.
The dollar lingered below ¥117.70 in early trading, dampened by an overnight plunge of U.S. equities on the back of lower crude oil prices.
With risk-averse sentiment rekindled, the greenback came under further selling pressure and fell below ¥117.40 as Tokyo stocks extended losses sharply after a weak start.
Still, the U.S. currency resisted a further drop once it slipped below ¥117.50.
“The dollar attracted purchases from real demand-backed players at levels below ¥117.50,” an official at a currency brokerage firm said.
In late hours, the dollar topped ¥118 after Tokyo stocks cut losses in the wake of a rebound in Shanghai equities. The Shanghai composite stock index closed above the 3,000 threshold after losing over 2 percent in early trading.
Still, the dollar’s topside was capped by lingering worries over the Chinese economy and unstable crude oil prices, market sources said.
“The dollar may test its downside again as the risk-averse mood among investors is expected to continue unless the Chinese economy and crude oil prices regain stability,” an official of another currency brokerage house said.