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The dollar weakened to levels below ¥110 in Tokyo trading Wednesday, on the back of lower U.S. long-term interest rates.

At 5 p.m., the dollar stood at ¥109.78-79, down from ¥110.29-29 at the same time Tuesday. The euro was at $1.1878-1878, up from $1.1818-1819, and at ¥130.41-42, up from ¥130.36-37.

After falling to around ¥109.70 in overnight trading in response to the benchmark 10-year U.S. Treasury yield’s drop to 1.65%, the dollar edged higher on buying by Japanese importers for settlement purposes in the early morning.

In midmorning trading, the greenback sank below ¥109.60 due to selling by dollar-long domestic exporters and foreign short-term players, traders said.

But the dollar soon recouped the losses and went sideways in the ¥109.70 zone in quiet trading.

With few fresh market-moving developments in sight, players took to the sidelines to wait for the release later in the day of the minutes of the U.S. Federal Reserve’s March 16-17 Federal Open Market Committee meeting, traders said.

“The dollar has been top-heavy since its failure to reach ¥111 last week,” a currency broker said.

Still, the U.S. currency “can maintain its underlying strength even if it undergoes some minor corrections” amid unabated hopes for the U.S. economy’s early recovery thanks to the fast coronavirus vaccine rollout, a Japanese bank official noted.

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