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The dollar rose to around ¥103.40 in Tokyo trading Friday, recovering from a plunge the previous day.

At 5 p.m., the dollar stood at ¥103.46, up from ¥103.18 at the same time Thursday. The euro was at $1.2247, up from $1.2232, and at ¥126.72, up from ¥126.22.

In overseas trading Thursday, the dollar plummeted below ¥102.90, reflecting speculation that the U.S. Federal Reserve will continue its monetary easing measures for an extended period of time, as well as sluggish U.S. economic indicators.

In Tokyo on Friday, the U.S. currency rose above ¥103.30 in the morning, supported by buybacks and buying by Japanese importers. It rose close to ¥103.50 in midafternoon trading.

The greenback then saw its topside capped amid a tug-of-war between buying and selling, including by European players.

Many market sources predicted that the dollar-yen pair will see position-adjusting moves toward year-end.

“As players confirmed the dollar’s resilience on its falls below ¥103, moves to test its downside have subsided in the short term,” an official at a Japanese bank said.

Other market sources, however, warned that the dollar’s downtrend will continue into early next year.

For the time being, currency players are expected to keep their attention on trade negotiations between the European Union and Britain, and talks on an additional coronavirus relief package in the United States, traders said.

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