The dollar weakened to levels below ¥108.30 in Tokyo trading Monday, hit by risk-off selling amid rising U.S.-China tensions.

At 5 p.m., the dollar stood at ¥108.22, down from ¥108.89 at the same time Friday. The euro was at $1.2017, up from $1.1987, and at ¥130.06, down from ¥130.53.

The dollar sank to around ¥108.50 from levels above ¥108.70 in the morning, due to falls in U.S. stock futures and long-term interest rates.

After moving mostly in the latter half of the ¥108.50 zone, the greenback slipped through ¥108.30 in late afternoon trading joined by European players.

The U.S.-China relationship has attracted renewed market attention as a risk factor, since Beijing harshly reacted to a joint statement issued last week by Prime Minister Yoshihide Suga and U.S. President Joe Biden that underscored the importance of Taiwan’s peace and stability, a Japanese bank official said.

Now that U.S. long-term interest rates’ ascent has come to a pause, the dollar is growing more vulnerable to bearish news.

“Players need to carefully determine whether to keep the dollar in ¥108 territory or see how far it will go down,” a currency broker said.

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