The dollar rose back above ¥113 in Tokyo trading on Monday, but its topside was capped as market players retreated to the sidelines ahead of the U.S. midterm elections Tuesday.
At 5 p.m., the dollar stood at ¥113.17-18, up from ¥112.96-97 at the same time Friday. The euro was at $1.1382-1382, down from $1.1435-1436, and at ¥128.83-83, down from ¥129.18-19.
The dollar moved on a firm note around ¥113.10-20 in early trading after topping ¥113 in New York on Friday thanks to strong U.S. job data for October.
Later in the morning, the greenback was caught in a tug of war between purchases by Japanese importers and selling sparked by a tumble of the Nikkei 225 average, traders said.
The U.S. currency rose above ¥113.30 in the afternoon thanks to purchases for position adjustments before losing some of its momentum in late trading due to profit-taking, they said.
“Stepping up dollar buying is difficult as a wait-and-see mood is increasing prior to the U.S. midterm elections,” an official of a bank-linked securities firm said.
The official added that dollar buying is expected to take the upper hand after the closely watched elections.
Meanwhile, a currency broker noted that while the Republican Party is seen maintaining more than half of the seats in the Senate, the Democratic Party is expected to win the House of Representatives.
If this happens and President Donald Trump faces difficulties managing his administration as a result, the dollar could come under selling versus the yen, the broker said.