Business / Financial Markets | CURRENCY MARKET

Dollar hurt by euro’s plunge, drops to ¥110.70

JIJI

The dollar was weaker below ¥110.70 in Tokyo trading late Friday, affected by the euro’s drop against the yen.

At 5 p.m., the dollar stood at ¥110.67-67, down from ¥111.04-04 at the same time on Thursday. The euro was at $1.1464-1466, down from $1.1583-1584, and at ¥126.89-89, down from ¥128.63-63.

In early trading, the dollar rose above ¥111.10 after attracting purchases against the euro and the currencies of emerging economies.

The greenback fell to around ¥110.90 in midmorning trading as Japan’s benchmark 225-issue Nikkei stock average sank into negative territory soon after the opening bell, traders said.

In afternoon trading, the U.S. currency slipped below ¥110.70 in line with the sluggishness of Japanese stock prices and a drop in long-term U.S. interest rates, traders said.

The dollar climbed back above ¥111 after the euro fell below $1.15 for the first time in some 13 months later in the afternoon.

But in late trading, the dollar turned lower again and dropped below ¥110.70, reflecting the euro’s weakness against the yen.

Traders attributed the euro’s plunge to growing concerns over European banks’ assets linked to Turkey following a tumble of the Turkish lira.

Dollar-yen trading “is likely to become directionless as both the U.S. and Japanese currencies are being bought” against the euro, an official of a major securities firm said.

“The dollar is unlikely to slip below ¥110 (anytime soon) as it is attracting purchases, but it’s easy for the yen to strengthen (against other major currencies) on the back of a risk-averse mood stemming from stock market sell-offs across the world,” an official of a Japanese bank said.