The dollar dropped below ¥108.50 in Tokyo trading Wednesday, with expectations for improvement in U.S.-China trade ties fading away.
At 5 p.m., the dollar stood at ¥108.44, down from ¥108.66 at the same time Tuesday. The euro was unchanged at $1.1068, and at ¥120.01-02, down from ¥120.27.
The dollar fell below ¥108.40 in the early morning, as investor concerns over a possible escalation of the U.S.-China trade conflict were rekindled by the U.S. Senate’s passage of a bill to support pro-democracy protesters in Hong Kong.
After bouncing back above ¥108.50 on real demand-backed buying by Japanese importers, the dollar returned to levels below ¥108.40 later in the morning following media reports that China threatened retaliatory measures against the United States.
The greenback stayed almost static before picking up steam in late afternoon trading.
“Investors cannot tilt positions either way as long as it remains unclear whether the U.S.-China trade talks will be brought to a successful end,” a currency broker said.