The dollar rose above ¥109.30 in Tokyo trading Wednesday, on the back of a stock market rally and real demand.
At 5 p.m., the dollar stood at ¥109.33, up from ¥108.93 at the same time Tuesday. The euro was at $1.1037, down from $1.1050, and at ¥120.66, up from ¥120.36-37.
The dollar was pushed down to levels below ¥109.40 by profit-taking around midmorning after rising above ¥109.50 on purchases induced by expectations for Chinese economic and financial measures to fend off adverse effects of the new coronavirus epidemic on the world’s second largest economy.
But the greenback firmed back later in the morning, with players cheering the 225-issue Nikkei average’s substantial rise and Japanese importers stepping buying of dollars for settlement purposes.
Thereafter, the dollar struggled for direction.
“Some investors believe that the Chinese central bank’s liquidity injections would alleviate the economic impact of the coronavirus outbreak, but many others take a wait-and-see attitude,” said an official at a foreign exchange margin trading service firm.
A Japanese bank official expressed hope that it will become clearer next week whether the epidemic is going to be contained.