The dollar lost further ground to trade below ¥104.60 in Tokyo on Friday, with a risk-off mood enhanced by caution over sell-offs in the European and U.S. stock markets.

At 5 p.m., the dollar stood at ¥104.57, down from ¥104.76 at the same time Thursday. The euro was at $1.1848, up from $1.1793, and at ¥123.89, up from ¥123.52.

After moving around ¥107.70 in overnight trading, the dollar firmed back to hit levels above ¥107.80 in the morning on buying by Japanese importers for settlement purposes and by investors to square positions ahead of the four-day weekend through Tuesday in Japan.

The greenback repeated minor fluctuations for most of the afternoon amid a dearth of fresh incentives.

But after European players joined dollar-yen transactions in later hours, the U.S. currency went south as “the yen attracted safe-haven buying stemming from falls in European stocks in early Friday trading and in U.S. stock index futures in off-hours trading,” a currency broker said.

With the U.S. Federal Reserve expected to maintain its near-zero interest rate policy at least until the end of 2023, market participants “are anticipating the dollar’s further depreciation,” an official at a Japanese bank said.

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