Business / Financial Markets | CURRENCY MARKET

Dollar softens to around ¥110.70 in Tokyo after Shanghai stocks slide

JIJI

The dollar weakened slightly to around ¥¥110.70 in late Tokyo trading Friday after being dragged down by rekindled concerns over the Chinese economy.

At 5 p.m., the dollar stood at ¥110.70-71, down from ¥110.78-78 at the same time on Thursday. The euro was at $1.1387-1388, up from $1.1367-1368, and at ¥126.07-07, up from ¥125.92-94.

The dollar moved above ¥111 in early trading after gaining ground in overseas markets overnight thanks to rises in U.S. stocks and long-term U.S. interest rates, traders said.

But the greenback slid below ¥110.90 later amid a paucity of fresh trading incentives and lingering concerns over the courses of the two economies and the currencies of Turkey and other emerging countries, they said.

The U.S. currency fell past ¥110.80 in late trading after the key Shanghai stock market index hit its lowest level in two years and seven months, stoking concerns about the Chinese economy.

The dollar was also hit by position-adjustment selling ahead of the weekend, a foreign-exchange brokerage official said.

The United States and China are slated to hold trade talks by the end of this month. But an official at a Japanese securities firm was pessimistic.

“It’s difficult for the two countries to pave the way for resolving their trade dispute as the United States is set to slap additional trade sanctions on China on Thursday,” the official said.

Dollar-yen trading will likely continue to be influenced by factors outside Japan next week, such as media reports related to the U.S.-China trade talks, market sources said.