The dollar fell below ¥107.70 in Tokyo trading Wednesday, carrying over its weakness overseas.
At 5 p.m., the dollar stood at ¥107.67-68, down from ¥108.34-34 at the same time on Tuesday. The euro was at $1.0918-0922, up from $1.0887-0891, and at ¥117.58-58, down from ¥117.96-97.
In overseas trading Tuesday, the dollar dropped to levels around ¥107.70 on selling triggered by the U.S. Institute for Supply Management’s manufacturing index for September slipping through the boom-or-bust line of 50.
After moving narrowly in early Tokyo hours, the greenback gradually rose toward noon on real demand-backed buying. But in late afternoon trading, it met with speculative selling by European players and fell back into a range around ¥107.60, traders said.
“The manufacturing index’s below-50 reading for the second straight month had a big impact,” a market source said.
“The dollar also faced a headwind from U.S. President Donald Trump’s criticism of the Federal Reserve after the release of the dismal index,” a currency broker said.
The dollar, however, resisted from tumbling on the back of expectations for the Bank of Japan’s fresh easing and buying by Japan’s Government Pension Investment Fund, which is reportedly boosting investment in foreign bonds, an official at a major securities firm said.