The dollar slipped below ¥110 in Tokyo on Thursday for the first time since June 21 partly because safe-haven buying of the yen ballooned amid growing concerns over the novel coronavirus crisis.

At 5 p.m., the dollar stood at ¥109.78, down from ¥110.63 at the same time Wednesday. The euro was at $1.1819, down from $1.1825, and at ¥129.76, down from ¥130.83.

After trading above ¥110.60 in the early morning, the dollar fell close to ¥110.40 as the 225-issue Nikkei average’s drop induced risk-averse buying of the yen.

The U.S. currency then showed resilience to move in a narrow range around ¥110.50.

But selling gathered steam in the afternoon to push the dollar below the previous day’s lows of around ¥110.20. Stop-loss sales added to the downward pressure on the dollar.

Stepped-up euro selling against the yen also accelerated the greenback’s drop vis-a-vis the Japanese currency, according to market sources.

“Due to little prospect of the delta variant of the novel coronavirus being brought under control, players who had built up yen short positions apparently moved to buy back the Japanese currency as a safe-haven currency,” a Japanese think tank official said.

The yen rose at a time when many market players expect the European Central Bank to show its intention to keep a dovish stance in its policy review, to be announced later on Thursday, a currency broker said, adding that falling crude oil prices also contributed to the stronger yen.

With investors seen buying the dip, however, “the dollar will unlikely fall to around ¥109.50 any time soon,” the currently broker added.

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