The dollar eased below ¥108.70 in Tokyo trading on Wednesday, pressured by a slump in the Tokyo stock market and position-adjustment selling.
At 5 p.m., the dollar stood at ¥108.68, down from ¥108.74 at the same time Tuesday. The euro was at $1.2444, up from $1.2352, and at ¥135.25, up from ¥134.33.
The dollar topped ¥109 in midmorning trading thanks to the Bank of Japan’s stepped-up purchases of Japanese government bonds in the day’s money market operation.
But the buying was short-lived, with players increasingly responding calmly to the operation, sending the dollar back below ¥108.80, an asset management firm official said.
The greenback attracted renewed demand after U.S. President Donald Trump announced a plan to boost infrastructure investment to $1.5 trillion in his first State of the Union address. But there was no follow-through buying due to a lack of specific explanation about the plan, a currency broker said.
In the wake of a sharp downturn in the stock market, the dollar dropped below ¥109, again.
The U.S. currency was also hit by selling to adjust positions before the end of the U.S. Federal Reserve’s two-day Federal Open Market Committee meeting, traders said.