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The dollar inched down to levels below ¥108 in lackluster Tokyo trading Thursday.

At 5 p.m., the dollar stood at ¥107.90, down from ¥108.22 at the same time Wednesday. The euro was at $1.2043, up from $1.2011, and at ¥129.95, down slightly from ¥129.99.

Following a moderate rise on the 225-issue Nikkei average’s sharp upturn, the dollar fell back past the ¥108 line in line with a drop in U.S. long-term interest rates.

The greenback regained ground it had lost due also to a crude oil price drop, thanks to the Nikkei’s further rise in the afternoon.

But the U.S. currency, again, sank into ¥107 terrain in late trading joined by European players.

The dollar is believed to have been affected by stepped-up position-squaring activities involving European currencies ahead of a European Central Bank policy meeting later the same day, traders said.

“Investors have been reluctant to sell the yen, deemed as a safe-haven currency,” in view of surging coronavirus cases in various parts of the globe, including India, a currency broker pointed out.

Some players said they will watch the ECB meeting as well as the U.S. Federal Reserve’s Federal Open Market Committee meeting next week, after the Bank of Canada announced Wednesday a decision to taper its government debt purchases.

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