Business / Financial Markets | CURRENCY MARKET

Dollar weakens to around ¥106.80 in Tokyo after slide in Japanese, U.S. stock prices


The dollar fell to around ¥106.80 in Tokyo on Thursday, as stock prices plunged in Japan and the United States, and U.S. long-term interest rates declined.

At 5 p.m., the dollar stood at ¥106.79-80, down from ¥107.06-07 at the same time Wednesday. The euro was at $1.2200-2200, down from $1.2222-2226, and at ¥130.29-30, down from ¥130.87-88.

The dollar carried over its sluggish tone from overnight trading overseas, where dollar selling intensified due to a plunge in U.S. stocks triggered by lower crude oil prices.

After briefly attracting buying from Japanese importers in the morning, the dollar stayed under downward pressure as Tokyo stocks extended their losses in the afternoon, traders said.

The dollar’s drop, however, was limited on Thursday despite the dollar-negative environment, also marked by the drop in U.S. long-term interest rates, the traders added.

“Many investors look eager to buy dollars around ¥106.50,” an official at a foreign-exchange margin trading service said.

The greenback was also supported by buybacks of the euro in cross-currency trading involving the yen, said an official at a Japanese bank.

Still, a currency market broker said it would be difficult for investors to step up dollar purchases as long as stocks remain weak inside and outside Japan.

The dollar-yen sector is likely to be affected for the time being by the course of yen crosses, not only by stock market developments, traders said.

The euro may fall against the yen on concerns about the political situation in Italy, which will hold a general election on Sunday, a currency market broker said.