The dollar fell below ¥110 in late Tokyo trading Thursday due chiefly to worries about U.S. trade sanctions against China.
At 5 p.m., the dollar stood at ¥109.92-93, down from ¥110.62-63 at the same time on Wednesday. The euro was at $1.1817-1818, up from $1.1745-1749, and at ¥129.91-92, slightly down from ¥129.94-95.
The dollar fell to levels close to ¥110 in early trading due to profit-taking following the U.S. Federal Reserve’s decision to raise interest rates, traders said.
After bouncing back to around ¥110.30 in midmorning trading thanks to purchases by Japanese importers, the dollar dropped to around ¥110 again in afternoon trading as the loss in the benchmark 225-issue Nikkei stock average expanded, traders said.
In late trading, the dollar met with heavy selling by European players and breached ¥110.
“The dollar’s topside (versus the yen) is heavy” amid concerns over fierce U.S.-China trade friction following a news report that the administration of U.S. President Donald Trump is preparing to impose sanctions against China as early as Friday over its alleged infringement of U.S. intellectual property rights, an official of a bank-linked securities firm said.
If such sanctions are imposed, “it will not be easy for the dollar to retake ¥110” in the near future, a think tank official said.
The official also said that the dollar is expected to rise against the yen if U.S. interest rates go up in step with European rates following a policy-setting meeting later Thursday at the European Central Bank, which is believed to be discussing an exit strategy for its quantitative easing policy.