Business / Financial Markets | CURRENCY MARKET

Dollar softens to around ¥108.20 in Tokyo after drop in Chinese stocks

JIJI

The dollar was slightly weaker around ¥108.20 in Tokyo trading late Friday, driven down by lower Chinese stock prices.

At 5 p.m., the dollar stood at ¥108.20-20, down from ¥108.34-35 at the same time on Thursday. The euro was at $1.1284-1284, down from $1.1294-1294, and at ¥122.10-10, down from ¥122.37-37.

The dollar moved around ¥108.30 in early trading before firming to around ¥108.40 around midmorning due to real demand-backed purchases ahead of the weekend.

In afternoon trading, the greenback traded around ¥108.20-30.

The U.S. currency fell below ¥108.20 in late hours in line with falls in Chinese stock prices and U.S. long-term interest rates.

A currency broker said the dollar’s topside was pressured by weak Chinese industrial production data for May, while noting that Chinese retail sales data for the month “was so bad.”

In addition, the dollar was apparently dragged down by the top-heaviness of the benchmark 225-issue Nikkei stock average, traders said.

But the U.S. currency attracted buying on dips after slipping below ¥108.20, traders said.

On the attacks on two tankers, one them Japanese, near the Strait of Hormuz on Thursday, an official of a foreign-exchange margin trading firm said higher crude oil prices lifted U.S. stocks the same day. The attacks “can also serve as an incentive for risk aversion,” the official said, explaining the incidents currently are not a decisive market-moving factor.

Market players are paying attention to U.S. retail sales data for May to be released later Friday, with a wait-and-see mood building up prior to the U.S. Federal Reserve’s two-day Federal Open Market Committee meeting next week, traders said.