The dollar was firmer above ¥107.80 in late Tokyo trading Monday after expectations for a big interest rate cut by the U.S. Federal Reserve receded.
At 5 p.m., the dollar stood at ¥107.85-86, up from ¥107.64-64 at the same time on Friday. The currency briefly topped ¥108. The euro was at $1.1219-1219, down from $1.1264-1264, and at ¥121.01-02, down from ¥121.25-26.
The dollar “attracted buying to adjust positions as the view is growing that the Fed will cut interest rates by 0.25 percentage point instead of 0.5 point,” an official at a foreign-exchange margin trading firm said.
Buying by Japanese importers also pushed the greenback up against the yen, a currency broker said, adding that it became top-heavy around ¥108 because of weakness in Japanese and Chinese stock prices.
Market participants expect the dollar to move little in the days to come. “Players found it difficult to trade actively ahead of the European Central Bank’s policy meeting on Thursday,” an official of a major Japanese securities house said.
The outcome of Sunday’s election for the House of Councilors, the upper chamber of the Diet, “had only a limited impact” because the ruling bloc won a simple majority as expected, a foreign-exchange broker said.