The dollar was weaker below ¥112 in Tokyo trading Thursday after a news report said China is considering slowing or halting its purchases of U.S. Treasury bonds.
At 5 p.m., the dollar stood at ¥111.78, down from ¥111.94 at the same time Wednesday. The euro was at $1.1939, up from $1.1935, and at ¥133.46-47, down from ¥133.61.
The greenback stayed below ¥111.40 in early trading before climbing above ¥111.70, backed by purchases from domestic importers and institutional investors.
The dollar temporarily rose above ¥111.80 after a Chinese government source said that the news report about Beijing’s U.S. debt purchases may have been based on wrong information.
An official at a major Japanese bank said the dollar attracted buying on dips after a sharp fall this week.
An official of a bank-affiliated securities firm said the dollar’s topside is likely to remain limited amid lingering speculation that the Bank of Japan will start tapering monetary stimulus following Tuesday’s cut in the amount of super long-term Japanese government bonds it buys.
An official at a foreign-exchange margin trading firm said charts signal that the dollar is heading lower.
“The dollar may fall to around ¥110” in the days to come, the official said.