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The dollar recouped earlier losses to move around ¥109.30 in Tokyo trading Thursday, aided by a rise in U.S. long-term interest rates.

At 5 p.m., the dollar stood at ¥109.20, up from ¥109.15 at the same time Wednesday. The euro was at $1.1946, up from $1.1890, and at ¥130.47, up from ¥129.80.

Following its plunge into the ¥108.70 zone early in the morning in the wake of the U.S. Federal Reserve’s latest “dot plot” suggesting no interest rate hike until 2023, the dollar took an upturn as players moved to buy the dip.

The U.S. currency climbed to around ¥109.10 by noon, also supported by the Nikkei stock average’s sharp rally.

But a media report that the Bank of Japan will allow Japanese long-term rates to move in a slightly wider range pushed the dollar below ¥108.70 in the early afternoon.

“Investors rushed to sell the dollar for fear of the Japan-U.S. interest rate gap getting narrower,” a currency broker said.

After going sideways at round ¥108.80, the greenback spiked to around ¥109.30 in late trading as the key 10-year U.S. Treasury yield hit 1.7% in off-hours trading.

“The dollar is expected to remain on a firmer note amid unabated hopes for the U.S. economy’s recovery,” a trust bank official said.

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