Business / Financial Markets | CURRENCY MARKET

Dollar falls below ¥110 in Tokyo before slight rebound

JIJI

The dollar dropped below ¥110 in Tokyo trading Monday, hit by risk-averse selling amid growing fears about a global economic slowdown.

But the greenback showed resilience in late afternoon trading, traders said.

At 5 p.m., the dollar stood at ¥110.06-06, down from ¥110.77-77 at the same time Friday. The euro was at $1.1307-1307, down from $1.1387-1388, and at ¥124.45-45, down from ¥126.14-14.

In overseas trading Friday, the dollar temporarily fell below ¥109.80 after dismal European economic data hit the currency market.

Carrying over the weakness, the dollar moved around ¥110 in early Tokyo trading Monday. Toward noon, the U.S. currency slipped through ¥109.90 in the wake of the Nikkei 225’s tumble reflecting concerns over the course of the global economy, traders said.

Besides the weak German and French manufacturing data, the benchmark U.S. long-term interest rate’s fall below the key three-month rate helped swell the slowdown worries, market sources said.

In late afternoon trading, however, the dollar recouped some of the earlier losses thanks to buybacks triggered by a halt to the U.S. long-term rate’s decline in off-hours trading, they added.

“Speculation about the Bank of Japan’s purchase of exchange-traded funds also induced dollar buying in the afternoon,” an official at a major securities firm said.

But a think tank analyst pointed out that the market now tends to react easily to events and developments suggesting slowdowns around the world.