The dollar recouped some of early losses caused by a U.S. interest rate cut to move around ¥107.50 in Tokyo trading Wednesday.

At 5 p.m., the dollar stood at ¥107.52-53, down from ¥108.02-02 at the same time Tuesday. The euro was at $1.1159-1159, up from $1.1120-1120, and at ¥119.99-99, down from ¥120.12-12.

The dollar plunged below ¥106.90 in the early morning, after the Federal Reserve urgently lowered the target range for the federal funds rates by 0.5 percentage point to 1.00-1.25 percent to mitigate the impact of the novel coronavirus outbreak on the U.S. economy.

But the dollar recovered to around ¥107.50 in midmorning trading, thanks to real demand-backed buying. The greenback moved in a tight range around ¥107.40 mostly in the afternoon.

Investors moved to repurchase the dollar “taking its drop below ¥107 as excessive,” an official at a major Japanese bank said.

A think tank official suggested the possibility of the dollar having attracted buying by players welcoming strong performances of centrist candidate Joe Biden in primary elections and caucuses to pick a Democratic presidential nominee in a number of states on Super Tuesday.

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