The dollar was weaker around ¥109.40 in late Tokyo trading Monday, with players retreating to the sidelines ahead of key events abroad this week, including a policy-setting meeting of the U.S. Federal Reserve.
At 5 p.m., the dollar stood at ¥109.39-40, down from ¥109.75-76 at the same time Friday. The euro was at $1.1405-1405, up from $1.1323-1323, and at ¥124.77-77, up from ¥124.28-28.
After moving above ¥109.50 in early trading, the dollar lost momentum to slip below ¥109.30 in the midmorning in step with the weakness of the Nikkei 225 stock average. Selling by Japanese exporters also weighed on the U.S. currency, traders said.
Buybacks temporarily pushed up the dollar above ¥109.40, but the greenback fell back below the threshold toward noon.
In the afternoon, the dollar moved in a narrow range around ¥109.30-40 amid a dearth of trading incentives.
A report by The Wall Street Journal late last week that the Fed is considering an early end to its balance sheet reduction “helped diminish market expectations for a widening in Japan-U.S. interest rate gaps, and this made the dollar vulnerable to selling versus the yen,” an official of a major securities firm said.
Still, dollar-yen movements were limited as “market players found it difficult to tilt positions either way” prior to the Fed’s two-day Federal Open Market Committee meeting starting Tuesday and U.S.-China ministerial-level trade talks in Washington on Wednesday and Thursday, an official of a foreign exchange margin trading service firm said.