The dollar stood below ¥120 in post-holiday Tokyo trading late Thursday, cutting its early gains in a risk-off mood that intensified on a Japanese stock market tumble.
After rising above ¥120.30 in the morning, the dollar stood at ¥119.93-95 at 5 p.m., still up from ¥119.42-43 at the same time Friday. The Tokyo market was closed for three days through Wednesday for national holidays.
The euro was at $1.1212-1213, down from $1.1432-1433, and at ¥134.46-50, down from ¥136.54-55.
The greenback traded around ¥120.20 in early Tokyo trading Thursday, following an easing of the selling pressure that had built up just after the U.S. Federal Reserve’s decision last week to keep interest rates unchanged, traders said.
Later, purchases from Japanese importers helped lift the dollar to levels around ¥120.40 temporarily, as post-holiday commercial demand for dollars increased, the traders also said.
The U.S. unit fell below ¥120 after the Nikkei widened losses, the traders said.
“Risk-averse investors moved to buy the safe-haven yen as Tokyo stocks lost more than 400 points,” one currency broker said.
Behind the risk-off mood were worries about the Chinese economy, uncertainties over the timing of the Fed’s interest rate hike and possible negative effects on the European economy from an emission test cheating scandal at Volkswagen AG, traders said.
“Few players dared to chase the dollar higher” in this environment, an official at a foreign exchange margin trading service firm said.
The Fed’s statement released after its latest monetary policy decision on Sept. 17 and Fed Chair Janet Yellen’s comments at a subsequent press conference were taken to suggest the U.S. central bank’s dovish stance, a Japanese bank official said.
The market was waiting for Yellen’s speech later on Thursday to hear what she will have to say about the timing of the expected interest rate increase, traders said.
