The dollar rose to near ¥107 in Tokyo trading late Tuesday, pushed up by buying from European investors.
At 5 p.m., the dollar stood at ¥106.96-97, up from ¥106.56-56 at the same time on Monday. The euro was at $1.2319-2319, down from $1.2337-2337, and at ¥131.78-78, up from ¥131.47-47.
The dollar slipped below ¥106.30 in early trading, following overnight falls in long-term interest rates and stock prices in the United States.
But the dollar topped ¥106.80 in the afternoon, supported by a rebound in Tokyo stock prices and a rise in U.S. long-term interest rates in off-hours trading.
“The dollar drew purchases from Japanese importers and short-covering by speculative traders,” an official at a currency brokerage firm said.
In late hours, the dollar attracted buying from European traders and climbed above ¥106.90. Still, the greenback failed to reach ¥107.
A wait-and-see mood is growing in the market following new developments in a favoritism scandal over a controversial discount sale of a state-owned plot to private school operator Moritomo Gakuen, once linked to Japanese Prime Minister Shinzo Abe’s wife, market sources said.
Currency players also retreated to the sidelines before the release of U.S. economic data later on Tuesday, including the consumer price index for February.