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Dollar dips below ¥114.50 on stock slump

JIJI

The dollar briefly dived below ¥114.50 for the first time in about 15 months in Tokyo on Tuesday, dragged down by a plunge in stock prices at home and abroad amid intensified risk aversion.

At 5 p.m., the dollar stood at ¥115.29-30, down from ¥117.31-31 at the same time Monday. The euro was at $1.1182-1182, up from $1.1137-1137, and at ¥128.94-95, down from ¥130.65-66.

The dollar changed hands around ¥115.50 in early trading, carrying over its sluggish tone from overnight trading abroad, where the greenback fell below ¥115.20 due to falls in European and U.S. share prices on low oil prices.

The dollar later plunged below ¥114.30 around noon as Tokyo stocks dived. The benchmark Nikkei average lost nearly 1,000 points briefly in the afternoon.

“The currency market was dominated by a risk-off mood on the back of worries over European banks and overnight plunges in crude oil prices as well as European and U.S. share prices,” an official at a foreign exchange margin trading service firm said.

“The dollar was hit by heavy selling by speculative players,” a securities house official said.

A currency market broker said that “no major buyers of the dollar can be seen for now,” given the sharp fall in Tokyo stocks.

In late hours, however, the dollar rose back above ¥115 thanks to buybacks, market sources said.

Further support came from a rumor that the Bank of Japan carried out foreign exchange rate checks, which are sometimes followed by intervention, the sources also said.