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The dollar moved narrowly around ¥108.70 in Tokyo trading on Tuesday.

At 5 p.m., the dollar stood at ¥108.72, down slightly from ¥108.75 at the same time Monday. The euro was at $1.2255, up from $1.2197, and at ¥133.24, up from ¥132.64.

The dollar firmed moderately in the morning on buying by Japanese importers for settlement purposes, but was pushed back down by a fall of U.S. long-term interest rates in off-hours trading.

After hovering around ¥108.70 in the afternoon amid a dearth of new trading incentives, the greenback briefly slipped below ¥108.60 in late trading, following a further decline of U.S. interest rates and taking the effects of an appreciation of European currencies.

However, the dollar rebounded on market players’ belief that clear signs of U.S. economic recovery will prompt the Federal Reserve to taper its quantitative easing measures.

A currency broker said that the dollar has continued to be swayed by movements of U.S. long-term interest rates. An official at a Japanese bank said that dovish comments in a speech by Fed Governor La el Brained on Monday “put expectations for early tapering in retreat.”

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