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Dollar weaker around ¥109 in late Tokyo

JIJI

The dollar was weaker around ¥109 in Tokyo trading late Tuesday, dragged down by a plunge in stocks.

At 5 p.m., the dollar stood at ¥109.01-01, down from ¥109.91-91 at the same time on Monday. The euro was at $1.2395-2396, down from $1.2439-2440, and at ¥135.13-13, down from ¥136.72-73.

The dollar fluctuated in a narrow range around ¥109.00-20 in early trading after falling to around ¥109 overseas overnight in line with the U.S. stock market’s sharp decline.

The U.S. currency soon rose to levels close to ¥109.30 but dived below ¥108.60 later in the morning after the Nikkei 225 stock average accelerated its downswing.

In the afternoon, the dollar slipped below ¥108.50 as the Nikkei extended its losses and briefly nosed-dived more than 1,600 points, or about 7 percent.

The Tokyo stock tumble had been already expected in the wake of the Dow Jones industrial average’s largest-ever single-day point drop in New York on Monday. Still, risk-averse players’ buying of the yen as a safe-haven currency gathered stream as the Nikkei’s drop exceeded 1,000 points, a foreign exchange broker said.

Later in the afternoon, the U.S. currency attracted buybacks and climbed above ¥108.90 after Tokyo stocks recouped some of their heavy losses. The dollar then advanced above ¥109 in late trading.

Market players are closely watching whether U.S. equities will fall further, said an official of a foreign exchange margin trading service firm.