The dollar rose back above ¥118 in Tokyo trading on Wednesday, pushed up chiefly by surges in Tokyo and U.S. stock prices.
At 5 p.m., the dollar stood at ¥118.24-25, up from ¥117.76-77 at the same time Tuesday. The euro was at $1.0869-0870, edging up from $1.0866-0866, and at ¥128.53-54, up from ¥127.97-98.
The dollar was firmer around ¥118.40 in early trading after drawing demand in overseas trading overnight thanks to a rebound in crude oil prices and rises in European and U.S. equities.
Although Tokyo stocks rose sharply in the morning, the dollar fell to near ¥118 shortly past noon due to position-adjustment selling.
“The U.S. currency was hit by selling from Japanese exporters, which resulted in an oversupply of dollars in the market,” a foreign exchange broker official said.
“Some currency players adjusted their investment positions before upcoming key economic events,” an official at a foreign exchange margin trading service firm said.
The closely watched events include the announcement later on Wednesday of results of the U.S. Federal Reserve’s two-day Federal Open Market Committee meeting, as well as the Bank of Japan’s two-day Policy Board meeting from Thursday.
The dollar later rose back to around ¥118.40, attracting buybacks as Tokyo stocks regained upward momentum after cutting gains in the early afternoon.
Still, the dollar’s upside was capped at levels around ¥118.40 as players found it difficult to tilt their positions either way amid a wait-and-see mood before the release of an FMOC statement, market sources said.