The dollar climbed above ¥111.50 in Tokyo trading on Tuesday, supported by gains on the stock market. It shed part of its gains in late hours on news of terrorist bomb attacks in Brussels.
At 5 p.m., the dollar stood at ¥111.71-72, up from ¥111.33-34 at the same time Friday. The euro was at $1.1241-1242, down from $1.1282-1283, and at ¥125.58-60, down from ¥125.63-64.
The Tokyo market was closed Monday for a national holiday.
The dollar continued attracting purchases following a buying spree in New York overnight triggered by a senior U.S. Federal Reserve official’s remarks that gave rise to expectations for the Fed to carry out a fresh interest rate hike next month.
In a speech on Monday, Atlanta Fed President Dennis Lockhart said that there is “sufficient momentum evidenced by the economic data to justify a further step” at one of coming Federal Open Market Committee meetings, “possibly as early as the meeting scheduled for end of April.”
The dollar rose close to ¥112.20 soon after the Nikkei average got off to a bullish start. Although it fell back below ¥111.90 due to active selling from Japanese exporters in midmorning transactions, it recouped ¥112 around noon.
In the afternoon, the dollar weakened after the Nikkei average lost steam, but drew renewed purchases as the stock index widened gains toward the day’s closing.
“The dollar-yen pair lacked clear direction, moving in tandem with Tokyo stock prices,” a foreign exchange broker official said.
The dollar came under selling pressure in the late afternoon, following news of explosions at Brussels Airport.
The dollar’s downside was underpinned by the Fed officials’ hawkish remarks and stocks’ strength. But an official at a foreign exchange margin trading service firm pointed to the lack of powerful incentives to push up the dollar further.
“Players remained vigilant to lingering downside risks,” the person said.