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The dollar retook ¥109 for the first time in roughly two weeks in Tokyo trading Wednesday, following a rise in U.S. long-term interest rates.

At 5 p.m., the dollar stood at ¥109.01, up from ¥108.32 at the same time Tuesday. The euro was at $1.2073, up slightly from $1.2069, and at ¥131.63, up from ¥130.75.

The dollar rose past ¥108.90 in midmorning trading, thanks to purchases by Japanese importers for settlement purposes and position-squaring buying before the end of the Federal Reserve’s two-day Federal Open Market Committee meeting.

Failing to attract follow-through buying, however, the dollar went sideways in the ¥108.80 zone until around 3 p.m.

“Active trading was held in check” ahead of the announcement of the outcome of the FOMC meeting and U.S. President Joe Biden’s congressional speech later in the day, a currency broker said.

But the dollar later enjoyed renewed buying interest in the wake of the benchmark U.S. 10-year Treasury yield’s accelerated ascent, topping the ¥109 threshold by 4 p.m., traders said.

European players’ dollar buying against the euro also fueled purchasing of the greenback vis-a-vis the yen, they noted.

But the U.S. currency saw selling pressure build up quickly.

If Fed Chairman Jerome Powell signals tapering of quantitative easing at a news conference after the meeting, “the dollar would be firmer” amid strong expectations for a U.S. economic recovery, a Japanese bank official said.

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