Business / Financial Markets | CURRENCY MARKET

Dollar breaches ¥107 for first time since January in Tokyo trading

JIJI

The dollar temporarily breached ¥107 for the first time since early January in Tokyo trading Tuesday, following a U.S. media report citing President Donald Trump’s dissatisfaction with the U.S. security treaty with Japan.

At 5 p.m. the dollar stood at ¥107.03, down from ¥107.40 at the same time Monday. The euro was at $1.1388, up from $1.1376, and at ¥121.89, down from ¥122.19.

The dollar moved in a narrow range around ¥107.30 in early trading, as investors took a wait-and-see stance ahead of the expected start of Japan-U.S. ministerial trade talks on Tuesday, traders said.

The greenback gradually lost ground later in the morning, hit by selling from Japanese importers, traders said.

Additional U.S. sanctions against Iran and sharply lower Chinese stocks also weighed on the dollar-yen rate, market sources said.

The dollar fell below ¥107 in the early afternoon, as a risk-averse mood grew following a Bloomberg report that Trump recently mused to confidants about the United States withdrawing from its security treaty with Japan.

After the selling ran its course, the dollar showed some resilience and moved around ¥107 in late trades.

The U.S. media report “strengthened uncertainty over the Trump administration’s foreign policy,” an official of a bank-affiliated securities firm said.

“Lower U.S. and Japanese stock prices and a drop in U.S. long-term interest rates also pressured the dollar versus the yen,” an official of a foreign exchange margin trading service firm said.

“The dollar could fall below ¥106 on speculative selling ahead of the U.S.-China summit” later this week, the official said.

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