The dollar slipped below ¥110 in Tokyo trading on Wednesday, as the yen attracted safe-haven buying on growing geopolitical risks over North Korea’s missile and nuclear development programs.
At 5 p.m., the dollar stood at ¥109.81-82, down from ¥110.57-58 at the same time Tuesday. The euro was at $1.1742-1743, down from $1.1807-1808, and at ¥128.96-98, down from ¥130.57-57.
The dollar carried over its weakness from overnight trading overseas, where dollar selling gathered steam following a news report citing U.S. intelligence officials as saying that North Korea has succeeded in making a nuclear warhead that is small enough to be mounted on its missiles.
The dollar’s weakness in early Tokyo trading also stemmed from a report of North Korea’s state-run Korean Central News Agency that the country is carefully considering making missile strikes on areas around the U.S. Pacific territory of Guam, market sources said.
The dollar lost further ground to drop below ¥109.80, hitting the lowest level in one and a half months, following a plunge in Tokyo stock prices and a fall in U.S. long-term interest rates.
U.S. President Donald Trump said Tuesday that “North Korea best not make any more threats to the United States,” adding, “They will be met with fire and fury like the world has never seen.”
“Investors rushed to buy the yen as a safe-haven currency after geopolitical risks increased sharply in response to a bitter war of words between the United States and North Korea,” an official of a foreign exchange brokerage house said.