The dollar slipped through ¥107 in Tokyo trading Wednesday, chiefly pressured by the euro’s appreciation.
At 5 p.m., the dollar stood at ¥106.91, down from ¥107.30 at the same time Tuesday. The euro was at $1.1516, up from $1.1442, and at ¥123.13, up from ¥122.82-82.
The dollar lost ground against the euro first in overnight overseas trading, after the European Union leaders agreed on a €750-billion coronavirus recovery fund. The U.S. currency then fell below ¥106.60.
In Tokyo morning trading, the greenback recovered to around ¥106.90 thanks to buying by Japanese importers for settlement purposes.
Although the dollar saw selling regain strength as the Nikkei stock average dropped further, it was lifted in the late afternoon by media reports that the U.S. government abruptly ordered China to close its consulate general in Houston.
“The dollar reacted more sensitively to the euro’s popularity than the yen,” an official at a bank-affiliated securities firm said.
An official at a major Japanese bank observed dollar selling by investors concerned about a delay in the U.S. government’s implementation of fresh economic measures.
The official also noted that the dollar attracted safe-haven purchases in late trading in the wake of the news reports.