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The dollar inched up around ¥102.90 in Tokyo trading Tuesday, as market players took a wait-and-see attitude ahead of the U.S. Senate runoff elections in the state of Georgia later in the day.

At 5 p.m., the dollar stood at ¥102.94, up from ¥102.91 at the same time Monday. The euro was at $1.2259, down slightly from $1.2262, and at ¥126.19, almost unchanged from ¥126.19.

The dollar firmed to around ¥103.10 in overnight trading abroad as investors adjusted their positions ahead of the Georgia elections and sold the pound.

Tokyo market players took to the sidelines in the morning to wait for the elections, but sold the U.S. currency in the afternoon, briefly pushing it below ¥102.90, on concerns about the spread of the novel coronavirus in Japan and elsewhere.

They were incentivized to buy the yen, which they view as a safe asset, by Prime Minister Yoshihide Suga’s plan to declare another state of emergency over the epidemic on Thursday, an official at a trust bank said.

A currency broker said that the Georgia elections’ “impact on the currency market will be limited if they go as expected” and the Republican Party clinches at least one of the two contested seats to retain majority for the party in the Senate.

On the other hand, a Democratic sweep will make it difficult to predict market movements, an official at a foreign exchange margin trading service firm said.

The difficulty comes as such a Democratic victory will potentially lead to both larger fiscal spending and a corporate tax hike. Market players see the former as a positive for the dollar and the latter as a negative.

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