The dollar was slightly higher around ¥113.90 in Tokyo trading late Wednesday after overcoming early weakness thanks to higher long-term U.S. interest rates.
At 5 p.m., the dollar stood at ¥113.87-87, up from ¥113.81-81 at the same time on Tuesday. The euro was at $1.1579-1579, up from $1.1542-1543, and at ¥131.85-86, up from ¥131.37-38.
The dollar dropped below ¥113.60 in early trading, carrying over its sluggishness from overnight trading overseas, where the greenback met with selling amid concern over the financial situation in Italy.
The U.S. currency rose back to about ¥113.80 later in the morning following news that the Italian government is planning to reduce its budget deficit, traders said.
After the buying ran its course, the dollar fell below ¥113.70 in afternoon trading.
In late hours, the dollar firmed to levels close to ¥113.90, backed by a rise in long-term U.S. interest rates.
The dollar “staged a technical rally” in late trading after meeting with selling to adjust positions following its recent surge to around ¥114, an official at a Japanese bank said.
An official at a bank-linked securities firm said that the dollar “is likely to attract purchases on the back of the solid U.S. economy and higher U.S. interest rates, with risks related to emerging economies and concerns over trade friction receding.”
The dollar is expected to maintain its strength, the Japanese bank official said, while noting that the U.S. currency is seen fluctuating against the yen in the near future to consolidate its downside.