The dollar fell below ¥105.70 in Tokyo trading Tuesday, hit by selling on a rally.
At 5 p.m., the dollar stood at ¥105.65, down from ¥105.81 at the same time Monday. The euro was at $1.1990, up from $1.1893, and at ¥126.68, up from ¥125.84.
The dollar topped ¥106 in early morning trading, thanks to buying interest regrown by media reports about Chief Cabinet Secretary Yoshihide Suga’s determination to run in the race to pick outgoing Prime Minister and Liberal Democratic Party leader Shinzo Abe’s successor, traders said.
But the greenback was soon sold back and struggled for direction at levels around ¥105.70 later in the afternoon.
“The dollar-yen pair was supported by the view that Suga will be the next prime minister, as he will likely maintain the Abenomics reflationary policy mix to keep the yen low against the dollar,” a currency broker said.
But players found it difficult to actively buy the dollar vis-a-vis the yen in view of the U.S. currency moving on a weak note against the euro and other European currencies amid speculation about prolonged quantitative easing by the Federal Reserve, an official at a major Japanese bank said.