The dollar shot up past ¥109.65 in Tokyo trading Thursday, amid rekindled concerns over inflation in the United States following a jump in the U.S. consumer price index.
At 5 p.m., the dollar stood at ¥109.66, up from ¥108.79 at the same time Wednesday. The euro was at $1.2085, down from $1.2133, and at ¥132.53, up from ¥132.00.
Carrying over its uptrend in overseas trading brought about by the April CPI’s sharpest increase in 12 years and seven months and a subsequent surge in the benchmark 10-year Treasury yield to top 1.7%, the dollar traded well above ¥109.60 in the morning.
Although the 225-issue Nikkei average’s continued free-fall and selling by Japanese exporters and short-term players weighed down the dollar, the greenback showed resilience.
In the afternoon, the dollar briefly dropped close to ¥109.50 after weakening against the euro due in part to a dip in U.S. long-term interest rates in off-hours trading. But the dollar-yen pair firmed again following an upturn in the interest rates and the euro’s fallback.
Worried about inflation, “players are keenly watching the U.S. Federal Reserve’s stance toward quantitative easing tapering,” a currency broker said.
“The dollar-yen pair would be vulnerable to changes in stock prices and interest rates for the time being,” a securities firm official forecast.
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