Business / Financial Markets | CURRENCY MARKET

Dollar hit by a bout of selling to slip below ¥106 in Tokyo trading

JIJI

The dollar slipped below ¥106 in Tokyo trading late Tuesday, hit by a bout of selling after moving in a narrow range for the majority of the day.

At 5 p.m., the dollar stood at ¥105.98-98, down from ¥106.25-26 at the same time on Monday. The euro was at $1.0938-0939, down from $1.0982-0982, and at ¥115.94-94, down from ¥116.69-70. The euro fell below ¥116 for the first time in about 28 months.

After fluctuating around ¥106.20 in the early morning, the dollar rose to around ¥106.30 later in the morning, supported by real demand-backed buying and buying triggered by the benchmark 225-issue Nikkei stock average’s rise.

The greenback, however, failed to extend gains in the afternoon, pressured by selling on a rally due to a lack of further growth in the Nikkei and U.S. long-term interest rates, and moved around ¥106.20.

In the late afternoon, the buying of yen for dollars by European players mounted and the U.S. currency fell below ¥106.

“While the pound and other European currencies were sold and the dollar was bought in late Tokyo trading, the yen was bought more than that (the dollar),” an official at a foreign exchange brokerage firm said, noting that market players responded negatively to the turmoil related to Britain’s exit from the European Union.

An official at a foreign exchange margin trading-linked company said that market players “focused once again on the U.S.-China trade dispute,” with China lodging a complaint with the World Trade Organization against the United States over Washington’s imposition of fresh tariffs on Chinese products.

As both U.S. long-term rates and stock index futures dropped in off-hours trading, the official said that market players are wary of how the U.S. market will move after the Labor Day holiday on Monday.

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