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The dollar was weaker at around ¥106 in Tokyo trading on Thursday amid growing concern about U.S.-China tensions regarding the South China Sea.

At 5 p.m., the dollar stood at ¥106.00-00, down from ¥106.30-30 at the same time Wednesday. The euro was at $1.1834-1834, up from $1.1807-1808, and at ¥125.45-45, down from ¥125.51-52.

The dollar briefly fell below ¥105.80 in the morning due to concerns over an escalation in tensions between Washington and Beijing after the Chinese military fired four ballistic missiles into the South China Sea, traders said.

The greenback recovered above ¥106 on buybacks and buying from real demand-backed players. But it turned top-heavy around the level, pressured by selling on a rally.

“Risk aversion has increased amid concerns over a flare-up in U.S.-China tensions,” an asset management firm official said.

A wait-and-see mood prevailed as market players were looking at a speech by Federal Reserve Chairman Jerome Powell later on Thursday for any hints about the U.S. central bank’s policy guidelines, traders said.

Market players were also awaiting a news conference by Prime Minister Shinzo Abe on Friday for updates on his health, traders said.

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