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The dollar eased to around ¥109 in Tokyo trading Thursday, as buying sentiment was dampened by unstable conditions outside the currency market.

At 5 p.m., the dollar stood at ¥108.98, down from ¥109.07 at the same time Wednesday. The euro was at $1.2202, down from $1.2221, and at ¥132.97, up from ¥133.30.

The dollar maintained strength in the early morning after recovering to top ¥109.20 in overnight trading on a rise in U.S. long-term interest rates that came on the heels of the release of the minutes of the Federal Reserve’s policy-setting meeting last month, which revealed that some members proposed to start discussing tapering of quantitative easing.

But the dollar saw selling pressure gradually increase amid the U.S. interest rates falling back and the 225-issue Nikkei average tottering, traders said.

The greenback fell close to ¥109.00 later in the afternoon in response to buybacks of the euro and the British pound against the U.S. currency, traders said.

The tapering speculation-driven dollar buying did not last long because “players increasingly came to think that the Fed is unlikely to start curbing asset purchases before reviewing the current state of the U.S. economy and the coronavirus situation,” an official at a foreign exchange margin trading service firm noted.

Meanwhile, a currency broker pointed out that investors find it difficult to sell the safe-haven yen at a time when the cryptocurrency and natural resources markets are showing volatile swings.

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