The dollar bounced back above ¥123.60 in Tokyo trading on Tuesday, encouraged by stock market resilience. At 5 p.m., the dollar was quoted at ¥123.64-66, up from ¥123.28-29 at the same time on Monday. The euro was at $1.1059-1061, down from $1.1087-1090, and at ¥136.75-77, up slightly from ¥136.71-74. The greenback sank as low as around ¥123 in the morning as the Tokyo and Shanghai stock markets got off to a dismal start following the previous day’s falls. But the U.S. currency began to rally shortly before noon, as Tokyo and Shanghai stocks showed resilience, temporarily turning into positive territory. The dollar’s downside versus the yen appeared to be relatively firm despite heightened risk-averse sentiment around the globe following Shanghai composite stock index’s 8.48 percent slump on Monday, traders said. The dollar extended gains against the yen in late Tokyo trading, in line with its strengthening versus the euro. The late selling of the European single currency was attributed to profit-taking pressure following the previous day’s sharp gains amid a dearth of fresh incentives, an official at a foreign exchange brokerage house said. Market players are now focusing on a policy-setting meeting of the U.S. Federal Reserve to be held for two days from Tuesday. While no policy change is expected at the upcoming Federal Open Market Committee meeting, “traders are likely to take wait-and-see attitudes through tomorrow,� said an official at a foreign securities firm.

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