The dollar retreated to a one-month low, below ¥112 in Tokyo trading on Wednesday, dragged down by position-adjustment selling by European traders.
At 5 p.m. the dollar stood at ¥111.94-94, down from ¥112.74-75 at the same time Tuesday. The euro was at $1.1935-1935, down from $1.1952-1952, and at ¥133.61-61, down from ¥134.73-74.
After climbing close to ¥112.80 in early morning trading thanks to buybacks the dollar dropped below ¥112.20 around midmorning, weighed down by Japanese exporters’ selling.
The greenback struggled for direction moving around ¥112.30 without major trading incentives, before European traders’ selling pushed it below ¥112 in late afternoon trading.
Despite higher U.S. stock prices and long-term interest rates overnight, the dollar failed to go up due to the lingering impact from the Bank of Japan’s cut in the purchase amount for super long-term government bonds the previous day, said an official at a foreign exchange margin trading service firm.
But an official at another currency margin trading service provider said the yen’s firmness would be short-lived because it is hard to think that the central bank will begin moving toward tapering soon.