The dollar moved in a tight band around ¥109.90 in lackluster Tokyo trading on Wednesday, prior to the signing of a “phase one” U.S.-China trade deal later in the day.

At 5 p.m., the dollar stood at ¥109.91-91, down moderately from ¥109.98-98 at the same time Tuesday. The euro was at $1.1127-1128, down from $1.1141-1142, and at ¥122.32-32, down from ¥122.54-54.

The dollar firmed to around ¥110.10 in overseas trading Tuesday on the back of optimism about U.S.-China trade talks.

In early Tokyo trading Wednesday, however, the greenback fell below ¥109.90 in response to U.S. Treasury Secretary Steven Mnuchin’s remark that the existing U.S. punitive tariffs on Chinese goods will remain until the completion of a possible phase two trade agreement.

The dollar later fluctuated around ¥109.90, underpinned by buying on dips.

An official of a bank-affiliated securities firm said that the U.S. currency tends to see its topside capped when it rises above ¥110.

“Although excessive anxiety over the Middle East situation and U.S.-China trade friction has receded, market players remain somewhat cautious over future developments,” the official added, while citing a lack of positive factors as the reason for the dollar’s failure to advance well above ¥110.

Meanwhile, an official at a Japanese bank showed pleasure at the dollar’s latest advance above ¥110, noting that the U.S. currency previously faced difficulties breaking the barrier.

The dollar is now in the stage of solidifying its footing, and profit-taking is the only source of concern, the official added.