The dollar erased losses to come close to ¥110.70 in Tokyo trading Tuesday.
At 5 p.m., the dollar stood at ¥110.69, up from ¥110.64 at the same time Monday. The euro was at $1.1909, down from $1.1941, and at ¥131.83, down from ¥132.12.
The dollar slipped through ¥110.50 around midmorning, pressured by Japanese exporters’ selling and the Nikkei stock average’s plunge. But players moved to buy back the dollar in view of the greenback resisting dropping further.
After struggling for direction in the afternoon amid a dearth of fresh events, the dollar topped ¥110.60 on buying induced by the U.S. currency’s appreciation against Oceanian currencies and the euro.
“Behind the euro selling were heightened fears about a coronavirus resurgence” in Europe led by the delta variant, a currency broker said.
If another COVID-19 wave hits the United States, “the dollar-yen pair may be weighed on by speculation about the Federal Reserve’s postponement of an interest rate hike,” a Japanese bank official said.
A domestic brokerage house official forecast that players cannot make major moves ahead of the U.S. Labor Department’s release Friday of its employment report for June.
But it cannot be ruled out that dollar-yen transactions will be reinvigorated after closely watched jobs data for the same month by ADP Inc. are published Wednesday, the bank official added.
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