The dollar firmed to around ¥108.50 in Tokyo trading Tuesday thanks to real demand-backed buying at the end of fiscal 2020 in Japan.
At 5 p.m., the dollar stood at ¥108.42-42, up from ¥107.98-108.00 at the same time Monday. The euro was at $1.0996-0997, down from $1.1082-1082, and at ¥119.22-23, down from ¥119.66-68.
After moving below ¥108, the dollar jumped to around ¥108.70 on the back of fiscal year-end funding demand from Japanese importers, traders said.
Later the greenback lost steam, in line with a drop in Tokyo stocks.
“The dollar’s sharp rise suggests that funding demand was very strong,” an official at a major securities firm said.
Meanwhile, a trust bank official noted that dollar buying took the upper hand against the yen while both currencies were attracting risk-averse purchases amid the coronavirus pandemic.