The dollar was firmer above ¥111.30 in late Tokyo trading on Wednesday as a risk-averse mood associated with the Turkish economic crisis eased somewhat.
At 5 p.m., the dollar stood at ¥111.33-33, up from ¥111.10-10 at the same time on Tuesday. The euro was at $1.1332-1332, down from $1.1420-1422, and at ¥126.17-17, down from ¥126.87-91.
After drifting around ¥111.20 in early trading, the dollar spurted above ¥111.40 in the midmorning thanks to purchases by Japanese importers.
The greenback then dropped below ¥111.30, with the Japanese currency attracting safe-haven buying on the back of falls in Chinese stocks and the yuan, traders said.
In late trading, however, the dollar retook the line on buying, reflecting a pause in the decline of the euro, which has been sold amid investor concerns over the Turkish crisis’ impacts on European financial institutions with exposure to Turkish assets, they said.
“Dollar-yen trading is becoming less susceptible to the movements of the Turkish lira,” an official of a major securities firm pointed out.
But an official of a bank-linked brokerage house said, “An interest rate hike by Turkey’s central bank will be necessary to help the lira rise back to levels before its recent tumble, although speculators are now refraining from massive lira sales” following the bank’s announcement on Monday of support measures for the banking system.
The major brokerage official said that the dollar’s topside has been capped due to trade issues related to the United States, noting that the market faces a lack of positive incentives to help spur active buying of the greenback.