The dollar erased early gains on profit-taking to move at levels slightly lower than ¥110.90 in Tokyo trading Thursday.
At 5 p.m., the dollar stood at ¥110.87, almost unchanged from ¥110.87 at the same time Wednesday. The euro was at $1.1932, down from $1.1938, and at ¥132.30, down from ¥132.36.
The dollar advanced to 15-month highs above ¥111.10 toward midmorning on the back of higher U.S. long-term interest rates and strong demand from Japanese importers for settlements.
But selling to lock in gains soon gathered steam, pushing the greenback below ¥110.90.
The dollar moved on a sluggish note in the afternoon amid a dearth of active purchases.
After the U.S. currency rewrote its year-to-date high against the yen, “a sense of accomplishment” grew among players, a currency broker said.
But now that Japanese and U.S. monetary policies have shown an explicit difference in their directions with the Bank of Japan sticking to massive easing and the Federal Reserve heading toward tapering, “investors find it difficult to test the dollar’s downside,” a Japanese securities firm official said.
Analysts also pointed out that all technical charts suggest the dollar’s medium- to long-term ascent.
“The dollar-yen pair’s trading range is expected to creep up for the time being,” a major domestic bank official said.
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