The dollar rose above ¥112.10 in Tokyo trading Wednesday, attracting purchases by investors as they were cheering the sharp rise of Tokyo stocks and anticipating a further expansion in the Japan-U.S. interest rate gap.
At 5 p.m., the dollar stood at ¥112.11, up from ¥111.39 at the same time Tuesday. The euro was at $1.1687, down from $1.1715, and at ¥131.02, down from ¥130.51.
After moving around ¥111.80 in early trading, the dollar fell close to ¥111.70 around midmorning on media reports that the administration of U.S. President Donald Trump may impose a substantially higher tariff than initially considered on 200 billion dollars’ worth of Chinese imports, traders said.
But the dollar regained strength late morning and kept rising to top ¥112 in the afternoon on the back of the Nikkei stock average’s advance.
Some players moved to sell the dollar against the yen in view of a rise in Japan’s long-term interest rates Wednesday in the wake of the Bank of Japan’s decision, announced Tuesday, to lift the lid on its policy rate.
But as the central bank’s massive easing policy will continue to be in place, dollar-buying focusing on higher interest rates in the United States took the upper hand, traders also said.
The greenback would go up further if upcoming U.S. economic data prove stronger than expected, an official at a bank-affiliated brokerage firm forecast.