Business / Financial Markets | CURRENCY MARKET

Dollar weakens to around ¥108.70 in late Tokyo trading

JIJI

The dollar was weaker at around ¥108.70 in Tokyo trading late Thursday, pressured by a drop in U.S. interest rates following an surprisingly “dovish” outcome of the policy-setting meeting of the Federal Reserve.

At 5 p.m., the dollar stood at ¥108.72, down from ¥109.31 at the same time on Wednesday. The euro was at $1.1497, up from $1.1433, and at ¥125.03, up from ¥124.98.

In overseas trading the previous day, the dollar dropped to around ¥108.80 as long-term U.S. interest rates fell following a dovish statement announced by the Fed after its two-day Federal Open Market Committee meeting ended on Wednesday.

In early Tokyo trading, the greenback attracted buybacks and moved around ¥109.

The dollar gradually lost ground later, weighed down by growing prospects for narrower interest rate gaps between Japan and the United States, traders said.

In late trading, the U.S. currency dropped below ¥108.70 against the backdrop of a decline in U.S. interest rates.

“The Nikkei stock average’s strong performance triggered some risk-on yen selling, but lower U.S. interest rates weighed on the dollar versus the yen,” an official of a Japanese bank said.

Still, the dollar resisted falling further, as market players retreated to the sidelines to “see the results of the U.S.-China ministerial-level trade talks” ending later on Thursday, a currency broker said.