The dollar advanced to levels above ¥109.30 in Tokyo trading Thursday, due partly to real demand-backed buying after the Golden Week holiday season.

At 5 p.m., the dollar stood at ¥109.33, up from ¥108.88 at the same time Friday. The euro was at $1.2024, down from $1.2102, and at ¥131.46, down from ¥131.78. The Tokyo market reopened Thursday after three successive national holidays.

The dollar climbed close to ¥109.40 in the morning, thanks to the 225-issue Nikkei average’s sharp rally and buying by Japanese importers for settlement purposes.

The Australian dollar’s decline against the greenback following China’s announcement of a halt in economic and strategic dialogue with Australia helped the U.S. currency appreciate vis-a-vis the yen as well, traders said.

But the gains were pared in the afternoon, as players took to the sidelines ahead of the U.S. Labor Department’s release Friday of its employment report for April, a currency broker said.

The dollar-yen pair struggled for direction in the ¥109.30 zone while European currencies were swayed by position-squaring activities ahead of the Bank of England’s announcement of a monetary policy decision later on Thursday.

“The dollar is expected to keep appreciating against the yen at a gradual pace” reflecting the much faster progress in coronavirus vaccinations in the United States than in Japan and a brighter outlook for the U.S. economy than for the Japanese economy, a Japanese bank official said.

“The dollar would retake ¥110 in the not-so-distant future,” a financial research firm official said.

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