The dollar hovered around ¥104 yen in Tokyo trading late Monday, rebounding from levels below the line earlier in the day, as the effects of its resilience versus the Chinese yuan countered real demand-backed selling of the U.S. currency.

At 5 p.m., the dollar stood at ¥104.02, still slightly down from ¥104.06 at the same time on Friday. The euro was at $1.1973, up from $1.1927, and at ¥124.56, up from ¥124.13.

The dollar fell to around ¥103.80 in the morning due to selling by exporters for month-end settlement purposes and by investors after the benchmark Nikkei stock average succumbed to profit-taking.

But the greenback pared losses against the yen after midafternoon trading thanks to the effects of selling on a rebound of the yuan against the dollar. Earlier in the day, the Chinese currency attracted buying after China’s manufacturing purchasing managers’ index for November exceeded market expectations.

An official at a trust bank said that “the dollar-yen rate is top-heavy” due to concerns over the U.S. economic outlook amid a resurgence of novel coronavirus cases.

Meanwhile, an official from a Japanese bank said, “A chart analysis suggests that speculators will move to close their dollar-short positions when the dollar is under ¥104.”

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