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The dollar dropped to around ¥110.70 in Tokyo trading Tuesday amid heightened concerns over the coronavirus.

At 5 p.m., the dollar stood at ¥110.71-72, down from ¥111.73-74 at the same time Friday. The euro was at $1.0852-0853, up from $1.0795-0796, and at ¥120.15-16, down from ¥120.62-63. The Tokyo market was closed Monday for the Emperor’s Birthday.

In overseas trading, the dollar plunged to around ¥110.30, in response to a tumble in U.S. stocks due to concerns over the economic impact of the global coronavirus spread.

Supported by real demand-backed buying, the greenback rose to around ¥111 in the morning.

After falling to around ¥110.80 later in the morning, reflecting a dive in the Nikkei 225 stock average, the U.S. currency traded around ¥110.80 for the majority of the afternoon before succumbing to selling pressure in late trading.

“It would be natural for the yen to rise further against the dollar, judging from the drops in U.S. stock prices and interest rates. The only reason that the (dollar-yen rate) remained at such levels was because (market participants) were worried about the Japanese politics and economy due to the coronavirus outbreak,” an official at a major Japanese bank said.

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