The dollar surged to around ¥106.50 in Tokyo trading Wednesday as risk-on buying was triggered by the U.S. government’s decision to take a step back from its tariff war with China.
At 5 p.m., the dollar stood at ¥106.44-44, up sharply from ¥105.19-19 at the same time Tuesday. The euro was at $1.1179-1180, down from $1.1192-1192, and at ¥119.00-00, up from ¥117.73-74.
The dollar topped ¥106.60 in the early morning after the administration of U.S. President Donald Trump announced it would put off the imposition of a 10 percent tariff on Chinese consumer products including smartphones and laptop computers until Dec. 15.
Real demand-backed selling by Japanese exporters pushed the dollar below ¥106.30 around midmorning. In the afternoon, the greenback moved mostly between ¥106.40 and ¥106.60.
The day’s moves of the dollar-yen pair made it clear that “players are looking only at developments stemming from the U.S.-China trade conflict,” an official at a bank-affiliated securities firm said.
“The postponement decision should not be overly welcomed because the Trump administration has not aborted its plan to slap tariffs on Chinese goods,” said an official at a foreign-exchange margin trading firm.
But the official also noted that investors may get confused unless Trump does what he previously decided to do.