The dollar slid below ¥113.50 in Tokyo on Wednesday, weighed down by weaker oil on doubts over a conditional deal among four major oil producers to shore up prices.
At 5 p.m., the dollar was at ¥113.46-47, down from ¥114.49-50 at the same time Tuesday. The euro was at $1.1168-1168, up from $1.1153-1153, and at ¥126.71-73, down from ¥127.70-71.
The greenback traded slightly above ¥114 in the early morning after plunging below the level in overseas trading overnight following the deal among Saudi Arabia, Russia, Venezuela and Qatar to keep oil output at the January levels if other oil-producing countries follow.
The deal appears unlikely to take effect as Iran is eager to boost oil production following the recent lifting of international sanctions, market sources said.
Some market players were disappointed, as they had expected an agreement to reduce oil production, the sources also said.
In Tokyo, the greenback climbed as high as around ¥114.40 in the morning, supported by the Nikkei average’s early gains.
But it soon slipped below ¥114, dragged down by China’s announcement of a lower reference rate for the yuan and the Nikkei’s return to negative territory, traders said.
The dollar came under renewed selling in late trading, sinking below ¥113.40 temporarily.
With sluggish oil prices and the gloomy outlook for the Chinese economy continuing to hurt investors’ sentiment, currency traders are “unable to move to buy the dollar versus the yen,” an official at a currency margin trading service provider said.
Given the current market trend, “the 115-yen level is very far” for the dollar to reach, said an official at a major bank.