The dollar dropped below ¥112.50 in Tokyo trading on Tuesday, dragged down by falls on stock markets in Japan and China.
At 5 p.m., the dollar stood at ¥112.13-13, down from ¥112.87-88 at the same time Monday. The euro was at $1.1037-1037, down from $1.1087-1087, and at ¥123.76-77, down from ¥125.14-15.
The dollar was solid around ¥113 in early trading, after attracting demand overseas amid stronger oil and stocks in Europe and the United States.
Later in the morning, the dollar slipped quickly to levels around ¥112 due in part to stop-loss sell orders.
“The dollar was hit by an intermittent wave of selling from players disappointed at its failure to extend gains,” an official of a currency brokerage house said.
The greenback slipped below ¥112 in the afternoon, but jumped above ¥112.50 thanks to large-lot buying, market sources said. It came under renewed pressure in late hours on the back of declines in Japanese and Chinese equities.
The dollar was also weighed down by an overnight remark by a senior U.S. Treasury official who said that the U.S. government will underline the need to avoid manipulating exchange rates for competitive purposes at a two-day meeting of Group of 20 finance ministers and central bank chiefs in Shanghai from Friday.
“The dollar met with selling against the yen due to belief that the Bank of Japan will find it difficult to ease monetary policy further,” an official at another foreign exchange brokerage house said.
“Market sentiment also dampened by concerns over a possible exit by Britain from the European Union,” a Japanese bank official said.
Selling of the pound and the euro helped push up the yen, traders said.