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Trump jitters cap Yellen-induced dollar rise below ¥115

JIJI

The dollar surged to levels slightly below ¥115 in Tokyo trading on Thursday, taking a cue from a speech by U.S. Federal Reserve Chair Janet Yellen signaling a positive stance about raising interest rates.

The U.S. currency’s topside, however, was limited below the threshold ahead of Friday’s U.S. presidential inauguration of Donald Trump, who has expressed his discontent with the greenback’s current strength.

At 5 p.m., the dollar stood at ¥114.82-83, up from ¥113.32-33 at the same time Wednesday. The euro was at $1.0641-0641, down from $1.0678-0678, and at ¥122.19-20, up from ¥121.02-02.

In the speech in San Francisco on Wednesday, Yellen said the U.S. central bank “waiting too long” to additionally raise its policy interest rate “could risk a nasty surprise down the road — either too much inflation, financial instability, or both.”

Following the speech, the dollar advanced as high as around ¥114.90 in Tokyo, also supported by Japanese importers’ purchases and higher share prices, traders said.

Still, the U.S. unit failed to breach the ¥115 line during the Tokyo trading hours. “Traders are hesitating to buy the dollar beyond ¥115” ahead of Trump’s inauguration, said an official at a foreign exchange brokerage house.

“The dollar is expected to move between ¥114.50 and ¥115 for the time being, amid a growing wait-and-see mood,” also before a Senate committee confirmation hearing for Steven Mnuchin, Trump’s Treasury secretary pick, later on Thursday, an official at a major Japanese bank said.