By Barbara Kollmeyer and Carla Mozee, MarketWatch MADRID (MarketWatch) -- The U.S. dollar fell back below 101 yen on Thursday as the Nikkei Stock Average dramatically sank in the last few minutes of trade, tumbling more than 5%. Against Japan’s currency, the U.S. dollar USDJPY -0.46% traded at ¥100.68 compared with ¥101.10 late Wednesday. The dollar dipped below the ¥101 mark earlier in the day in apparent profit-taking. “We have been bullish on USD/JPY for some time and feel the pair can go higher, but we have reverted to the sidelines for now as the price action is all over the place,� said Chris Weston, chief market strategist at IG, in a note. Indeed, the dollar’s most recent push below the ¥101 threshold coincided with a plunge for the Nikkei Stock Average JP:NIK -5.15% , which closed down 5.2% Thursday after a tough session that began with a drop at the open of nearly 2%. The index had closed with a 0.1% gain on Wednesday. Not helping the Nikkei’s prospects, Wall Street stocks suffered a sharp fall a day prior amid concerns over fears the Federal Reserve will pare its bond-buying program, along with global growth concerns. Weston said the index just gave up and no one was buying. “All FT guys are watching the equity market at the moment...just confusion and erratic price action.� The ICE dollar index DXY -0.21% , which measures the greenback’s performance against six other major currencies, fell to 83.425 on Thursday, down from 83.680 on Wednesday. The WSJ Dollar Index XX:BUXX -0.28% , a gauge of the currency’s moves against a slightly wider basket, fell to 75.03 from 75.25. The dollar had also fallen against other key rivals on Wednesday. The euro EURUSD +0.19% firmed up as the dollar fell against the Japanese currency, fetching $1.2976, up from Wednesday’s level around $1.2930. The British pound GBPUSD +0.23% also got a bump. It traded at $1.5172, versus the prior day’s level of $1.5121. Aussie bounces back The Australian dollar staged a sharp turnaround Thursday against its U.S. rival, with strong Australia housing data helping the beleaguered currency fight off losses spurred by weaker figures on business investment. It moved a leg higher on dollar/yen action. The Australian dollar AUDUSD +0.39% bounced up to 96.82 U.S. cents after new-home construction approvals in Australia rose a seasonally adjusted 9.1% in April, according to the Australian Bureau of Statistics. The currency during the previous session visited lows not seen since October 2011. The better-than-expected housing report offset a downbeat headline figure related to business spending in Australia, where the key resources sector is expected to see a peak in investment this year. Minutes before the Aussie suddenly climbed, it had dropped to 95.81 U.S. cents after the statistics agency said business investment, including spending on buildings and equipment, fell 4.7% in the first quarter from the fourth quarter. The result was below expectations for an increase of 0.5%. The Aussie late Wednesday had bought about 96.33 U.S. cents. The agency’s survey showed businesses collectively plan to invest 156.47 billion Australian dollars ($150.74 billion) during fiscal 2013-2014, with that estimate down 9.8% compared with the year-earlier period, mainly as the projection for mining-sector spending fell nearly 15%. The Aussie has been beaten down this month, losing more than 7% against the U.S. dollar, also hurt by concerns about slowing in China, Australia’s biggest trading partner. The Reserve Bank of Australia will assess the capital-expenditure report as they gather for a meeting on interest rates next week. The central bank early this month cut the key rate to a record low 2.75%

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