The dollar was above ¥111 in Tokyo trading late Monday, amid a closely watched policy decision by the Bank of Japan at a two-day meeting through Tuesday.
At 5 p.m., the dollar stood at ¥111.02. The euro was at $1.1668, up from $1.1646, and at ¥129.56, up from ¥129.30.
In the early morning, the dollar dropped from around ¥111 to below ¥110.90.
After recovering to levels above ¥111 thanks to dollar-buying for settlement purposes in midmorning trading, the U.S. currency gained further ground, rising above ¥111.10 before noon.
The dollar moved on a weaker note in the afternoon.
Dollar-yen rate movements were limited before the BOJ’s policy announcements Tuesday, traders said.
The central bank is considering tolerating rises in 10-year Japanese government bond yields above its target of around zero percent, sources said.
But an official of a foreign exchange margin trading service firm said, “We’re not in a situation where monetary-tightening is allowed.”
“If no policy change is made at the meeting, the dollar will have some room to go up,” the official added.