The dollar advanced above ¥110.50 in Tokyo trading Friday, reflecting its surge against the euro following the European Central Bank’s decision to keep policy interest rates low.
At 5 p.m., the dollar stood at ¥110.51, up from ¥109.92 at the same time on Thursday. The euro was at $1.1588, down from $1.1817, and at ¥128.06, down from ¥129.91.
In early trading, the dollar rose above ¥110.60, helped by a tumble of the euro against the greenback after the ECB decided Thursday to keep policy interest rates unchanged at least until the summer of 2019, traders said.
The U.S. currency climbed to levels around ¥110.70 after the Bank of Japan announced shortly before noon that it has decided at a just-ended policy-setting meeting to maintain its massive monetary easing. The BOJ’s inaction came after the U.S. Federal Reserve decided Wednesday to raise interest rates.
In afternoon trading, the dollar maintained its strength versus the yen thanks to the benchmark 225-issue Nikkei stock average’s recovery, as well as speculative purchases by short-term players to induce stop-loss buy orders, traders said.
The greenback lost steam against the yen in late trading, weighed down by position-adjustment selling and falls in long-term U.S. interest rates in off-hours trading, traders said.
An official of a bank-linked securities firm said market players made their positions neutral in late trading as the United States is expected to impose new tariffs on Chinese goods as early as later on Friday.
“The main focal point is whether the euro will bottom out” against other major currencies following the ECB decision, an official at a foreign exchange margin trading service firm said.
The official also expressed an intention to watch moves by Chinese authorities after the U.S. trade sanctions.