The dollar moved tightly around ¥108.90 in Tokyo trading Thursday after firming on media reports indicating the possibility of the United States and China inking a preliminary trade deal at an early date.
At 5 p.m., the dollar stood at ¥108.88, up from ¥108.47 at the same time Wednesday. The euro was at $1.1080, up from $1.1077-1078, and at ¥120.65, up from ¥120.16-17.
Sentiment was brightened by U.S. President Donald Trump’s comment that trade negotiations with China are “going very well” and by a Bloomberg report that Washington and Beijing are closer to agreeing on a tariff rollback in the so-called phase one trade deal, traders said.
The dollar rose to around ¥108.90 before noon thanks to the 225-issue Nikkei average’s rebound and settlement demand from Japanese importers. News reports that the Japanese government would adopt a fresh stimulus package worth ¥13 trillion within the day also induced dollar buying against the yen.
But the greenback’s appreciation was limited, as closely watched U.S. economic indicators’ failures to beat market consensuses the previous day and lingering anxiety about the U.S.-China trade war prevented players from increasing their dollar long positions, traders said.
The dollar-yen pair remained vulnerable to remarks and developments related to U.S.-China trade, a Japanese bank official said.
Investors increasingly took to the sidelines to wait for the U.S. Labor Department’s employment report due out Friday, traders said.