The dollar tumbled below ¥108 in Tokyo trading Tuesday, breaching that threshold for the first time since Sept. 11 as the safe-haven yen attracted buying interest amid persistent worries about unstable stock prices.
At 5 p.m., the dollar stood at ¥107.75-76, down from ¥109.14-15 at the same time Friday. The market in Tokyo was closed Monday for National Foundation Day. The euro was at $1.2317-2317, up from $1.2283-2283, and at ¥132.72-72, down from ¥134.07-08.
The greenback drifted in a narrow range above ¥108.50 in overseas trading, following a brief dive close to ¥108 late last week.
In Tokyo on Tuesday, the U.S. currency was initially stuck at around the same range without major trading cues but began to rapidly fall early in the afternoon as the Nikkei 225 stock average’s dive into negative territory helped rekindle risk-averse sentiment among investors, traders said.
The dollar accelerated its fall in late trading, dragged down by falls in U.S. stock futures and long-term Treasury yields in premarket trading.
“U.S. stock futures’ falls boosted fears of another global stock sell-off,” an official at a foreign exchange brokerage house said.
Traders are now focusing on the release Wednesday of U.S. consumer price data for January. “If the data shows higher than expected inflation, interest rates could rise, prompting selling of U.S. shares and the dollar against the yen,” a Japanese bank official said.