The dollar climbed above ¥110.50 in Tokyo trading Thursday, backed by the benchmark Nikkei average’s solid performance in Tokyo’s stock market.
At 5 p.m., the dollar stood at ¥110.54-55, up from ¥110.21-22 at the same time Wednesday. The euro was at $1.1562-1563, down from $1.1575-1575, and at ¥127.82-83, up from ¥127.58-58.
The dollar moved around ¥110.30-40 in early trading before rising above ¥110.60 in midmorning trading after the Nikkei average recovered after a sluggish start, traders said.
The greenback hovered around ¥110.70 in afternoon trading as the Nikkei expanded its gains, traders said.
In late trading, the U.S. currency fell below ¥110.60 against a backdrop of falling long-term U.S. interest rates. While the dollar appeared to be on course to test ¥111 in the afternoon, it lost the momentum due to a lack of buying incentives, traders said.
Although concerns over U.S.-China trade friction were unabated, “there were no major news reports,” an official of a major Japanese bank said. “The risk-averse mood seems to have come to a halt due to higher stocks prices.”
A think tank official said “market sentiment on the dollar is strong, with players paying attention to monetary tightening in the United States.”
U.S. Federal Reserve Chairman Jerome Powell said Wednesday at an annual European Central Bank forum in Sintra, Portugal, that there is a strong case being made for gradual interest rate hikes.