The dollar fell to around ¥106.70 in Tokyo trading Friday, fluctuating in a narrow range for the entire day amid a wait-and-see mood.
At 5 p.m., the dollar stood at ¥106.76-77, down from ¥107.22-23 at the same time on Thursday. The euro was at $1.0971-0971, up from $1.0944-0945, and at ¥117.14-15, down from ¥117.35-36.
After dropping to around ¥106.50 in overseas trading, reflecting a deterioration in the U.S. Institute for Supply Management’s nonmanufacturing index for September, the dollar rose to around ¥106.90 in early Tokyo trading on the back of buybacks.
The greenback then eased to around ¥106.70 in the late morning, pulled down by the benchmark 225-issue Nikkei stock average’s drop into negative territory during the morning hours. Trading turned directionless in the afternoon as the U.S. currency moved around ¥106.70-80.
“While the dollar met with selling, due to a drop in U.S. long-term interest rates after the dismal economic data, expectations for an interest rate cut (by the U.S. Federal Reserve) helped push up stock prices, dampening the drop in the dollar-yen rate,” an official at a foreign-exchange margin trading service company said.
Investors are focused on the U.S. government’s employment statistics for September, which will be announced later on Friday, and statements by officials from the Fed.
“Looking at the recent bleak economic indicators, the effects of the U.S.-China trade war may have reached the labor market and the labor statistics are attracting attention more than usual,” an official at a foreign-exchange margin trading-linked company said.
“As there are many opportunities for Fed officials to make statements this weekend,” investors will use them to forecast moves on interest rate cuts in the future, the official added.