The dollar was trading slightly below ¥109.80 in Tokyo late Friday after trimming early gains following a hike in U.S. tariffs on $200 billion worth of Chinese products.
At 5 p.m., the dollar stood at ¥109.76-76, up from ¥109.62-62 at the same time on Thursday. The euro was at $1.1225-1226, up from $1.1187-1187, and at ¥123.21-22, up from ¥122.64-64.
The dollar gained some ¥0.10 to top ¥109.80 in early trading, lifted by media reports that U.S. President Donald Trump said he received a “beautiful letter” from Chinese President Xi Jinping and might speak with Xi about bilateral trade by phone.
After the Tokyo stock market opened, the greenback gathered steam to retake ¥110 thanks to a rebound in the Nikkei average. But the tariff hike and China’s harsh threats of countermeasures sent the dollar below ¥109.70 in the afternoon. In late trading, the greenback firmed slightly on buybacks.
“Although the dollar was prone to attract selling, investors were unable to drive it further down because all negative incentives had evaporated,” said an official at a foreign-exchange margin trading firm.
Players were hoping to see the outcome of the ministerial-level trade negotiations in Washington, a think tank official said, adding that the possibility of the U.S.-Chinese talks continuing next week instead of ending Friday cannot be ruled out.