The dollar shot up to around ¥114.20 in Tokyo trading on Wednesday, with risk appetite among investors perked up by stronger-than-expected U.S. manufacturing data released overnight.
At 5 p.m., the dollar stood at ¥114.24-25, up from ¥112.95-95 at the same time Tuesday. The euro was at $1.0859-0861, slightly down from $1.0875-0876, and at ¥124.07-08, up from ¥122.85-86.
In New York Tuesday, the U.S. Institute for Supply Management’s manufacturing index for February triggered dollar buying versus the yen, as the closely watched economic indicator rose to beat a market consensus, though it failed to top the boom-or-bust dividing line of 50 for the fifth straight month.
The dollar moved in a relatively narrow range around ¥114 from early Tokyo trading. But the greenback rose to surpass ¥114.30 in the late afternoon, backed by higher Shanghai stocks, traders said.
“The ‘risk-off’ mood receded as the U.S. economic outlook was brightened (by the ISM reading),” said an official at a private asset management firm.
But the dollar is “likely to face resistance when it approaches the major threshold of ¥115,” said an official at a currency margin trading service provider.
For the dollar’s further advance against the yen, other key economic indicators, including the U.S. government’s jobs data for February, due out Friday, need to show improvements, a foreign-affiliated securities firm official said.