The dollar pared losses to trade slightly above ¥117 in Tokyo on Monday, after plunging close to ¥116.50 amid uncertainties over the Chinese economy and oil prices.
At 5 p.m., the dollar was at ¥117.03-03, still down sharply from ¥117.63-63 at the same time Friday. The euro was at $1.0892-0892, up from $1.0868-0869, and at ¥127.47-48, down from ¥127.85-86.
In New York on Friday, the dollar slid to a five-month low of ¥116.51, as key U.S. crude oil futures tumbled to 12-year lows below $30 a barrel, and U.S. retail sales in December and the New York State manufacturing index for January fell short of market expectations, traders said.
The U.S. currency fell close to ¥116.50 again in early Monday trading in Tokyo, but rallied to as high as around ¥117.30 later in the morning as Tokyo stocks showed resilience after opening sharply lower.
A higher reference rate for the yuan, set by China’s central bank for Monday, also prompted buybacks of the dollar against the yen, traders said.
“Japanese importers and others moved to buy the dollar on dips,” a foreign exchange broker said.
Still, the dollar’s resilience versus the yen was limited, with its topside capped around ¥117.30, another currency broker said.
Risk-averse selling and buying on dips were mixed in the Tokyo market, keeping the dollar-yen pair in a narrow range in late trading, market sources said.
Given persistent worries over the Chinese economy and fears of a further fall in crude oil prices, the dollar “is likely to remain top-heavy against the yen for the time being,” an official at a major Japanese bank said.