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The dollar weakened to around ¥108.60 in Tokyo trading Wednesday, as news about a novel coronavirus resurgence in Europe enhanced a risk-averse mood.

At 5 p.m., the dollar stood at ¥108.60-60, down from ¥108.76-76 at the same time Tuesday. The euro was at $1.1819-1823, down from $1.1904-1904, and at ¥128.37-37, down from ¥129.46-50.

After firming on buying by Japanese importers for settlement purposes, the dollar fell to around ¥108.45 in the morning in the wake of the Nikkei stock average’s tumble and a drop in U.S. long-term interest rates in off-hours trading.

The greenback went sideways amid a dearth of fresh incentives for most of the afternoon. But after foreign players joined dollar-yen trading in late hours, the U.S. currency retook the ¥108.60 line on buying stemming from its appreciation against European currencies.

European currencies met with risk-averse selling by investors who grew concerned about the European Union’s curb on coronavirus vaccine exports to Britain and bleak British economic indicators, traders said.

“Both the dollar and the yen are now attracting risk-off purchases, after the greenback alone benefited from U.S. interest rates’ rising,” a Japanese bank official said.

“The dollar-yen pair is expected to struggle for direction,” a currency broker said.

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