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Dollar weaker below ¥111.50 in Tokyo

JIJI

The dollar was weaker below ¥111.50 in Tokyo trading on Friday, with its topside capped by speculation about a slower-than-expected pace of interest rate hikes in the United States.

At 5 p.m., the dollar stood at ¥111.33-34, down from ¥111.74-76 at the same time Thursday. The euro was at $1.1282-1283, up from $1.1259-1260, and at ¥125.63-64, down from ¥125.84-84.

The greenback hovered around ¥111.40 in the early morning, following wild swings in overseas trading overnight amid continued dollar selling triggered by the U.S. Federal Reserve’s dovish statement released earlier this week.

The dollar briefly dropped to around ¥110.80 in midmorning Tokyo trading, dragged down by increased sales from Japanese exporters, but soon climbed above ¥111 on a wave of buybacks.

The U.S. currency rose as high as around ¥111.60 in the afternoon, as Japan’s benchmark 225-issue Nikkei average recouped part of its earlier losses toward the close.

“After testing its downside, the dollar attracted buybacks reflecting transactions to adjust positions ahead of the weekend,” an official at a foreign exchange brokerage firm said.

The dollar-yen rate showed unstable moves in late hours amid crosscurrents of selling and buying.

Speculation about future interest rate hikes by the Fed at a slower pace than previously predicted weighed on the dollar. Meanwhile, the U.S. unit’s downside was underpinned by purchases when a fall below the ¥111 line is in sight, amid caution over possible dollar-supporting intervention by authorities, market sources said.