Business / Financial Markets | CURRENCY MARKET

Dollar strengthens to around ¥114.30 in Tokyo on higher U.S. rates


The dollar was firmer around ¥114.30 in Tokyo trading late Thursday on the back of higher long-term U.S. interest rates.

At 5 p.m., the dollar stood at ¥114.30-30, up from ¥113.87-87 at the same time on Wednesday. The euro was at $1.1493-1493, down from $1.1579-1579, and at ¥131.36-37, down from ¥131.85-86.

The dollar moved around ¥114.50 in early trading, carrying over its strength from overnight trading overseas — where it attracted purchases, helped by brisk U.S. economic indicators as well as higher long-term U.S. interest rates, brokers said.

The U.S. currency fell below ¥114.30 later in the morning after Japan’s benchmark Nikkei 225 stock average sank into negative territory.

In the afternoon, the dollar rose back to around ¥114.40 in line with a rise in U.S. interest rates in off-hours trading, traders said.

The dollar traded around ¥114.30 in later hours as the buying ran its course.

Although higher U.S. interest rates are supporting the dollar’s advance against the yen, an official at a Japanese bank said the greenback’s topside is growing heavy as Tokyo stock prices are dampened by the rise in interest rates.

But an official at a foreign-exchange margin trading service company said, “The Nikkei average is still moving at high levels,” adding that the recent stock falls are unlikely to lead to risk aversion.

The dollar’s downside against the yen is supported by purchases on declines, an official at a major Japanese bank said.

Currency market players still expect the dollar to test the levels above ¥114.70 that it marked in November last year, market sources said.