The dollar fell below ¥113.30 in Tokyo trading Thursday after U.S. Federal Reserve Chairman Jerome Powell signaled a possible slowdown in the pace of interest rate increases.
At 5 p.m. the dollar stood at ¥113.24, down from ¥113.86 at the same time Wednesday. The euro was at $1.1383, up from $1.1277, and at ¥128.91, up from ¥128.42.
In overnight trading abroad, the dollar hit two-week highs around ¥114 before losing ground on Powell’s comment in a speech at a New York conference Wednesday.
The impact of his remark lingered in Tokyo on Thursday, sending the U.S. currency below ¥113.30 temporarily, traders said.
A momentum to buy back the dollar was “sluggish,” a currency market broker said.
The greenback is unlikely to stay above ¥113 if the benchmark 10-year U.S. Treasury yield falls below 3 percent, the broker added.
Minutes of the U.S. Federal Open Market Committee meeting early this month will be released later on Thursday.
Regarding this, an official at a major life insurer said “a sense of caution is growing” among currency market participants following Powell’s dovish remark.
Meanwhile, a major Japanese bank official said the impact of the minutes on the currency market “will be limited” after a series of comments by senior Fed officials.