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The dollar sank to below ¥103.00 in Tokyo trading Monday, the first market day of 2021, pushed down by news of a potential state of emergency over the coronavirus in Japan.

At 5 p.m., the dollar stood at ¥102.91, down from ¥103.32 at the same time Wednesday, the previous trading day. The euro was at $1.2262, down slightly from $1.2266, and at ¥126.19, down from ¥126.75.

The dollar fell to around ¥103.00 in the morning after it was reported that the government is considering declaring a state of emergency over the novel coronavirus for the Tokyo metropolitan area.

The U.S. currency was range-bound in the afternoon, with its downside pushed up by real demand-backed buying after it fell below the ¥103 mark, according to an official at a bank-affiliated securities firm.

In late trading, the greenback lost further ground below ¥103 as the rise in U.S. stock futures boosted risk-on mood in the market.

“The dollar may slide further as it slipped below ¥102.88, the lowest level of December last year,” a currency broker said.

Market players are mainly focused on the U.S. Senate runoff elections in the state of Georgia on Tuesday. But one official at a foreign exchange margin trading service firm said that the details of the expected state of emergency in Japan may also sway the market as the news “was a reality check against market optimism in the previous year.”

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