The dollar recovered some of its early losses to fluctuate in a narrow range around ¥109.45 in Tokyo trading Wednesday.
At 5 p.m., the dollar stood at ¥109.44-44, down from ¥109.63-63 at the same time Tuesday. The euro was at $1.1728-1728, up from $1.1726-1726, and at ¥128.36-36, down from ¥128.54-59.
Remaining under selling pressure generated by default fears over Chinese real estate conglomerate Evergrande Group in overseas trading, the dollar went under ¥109.20 in the early Tokyo morning.
But the dollar rose close to ¥109.50 in midmorning as Japanese importers boosted buying for settlement purposes and investors took heart from a media report that Evergrande would be able to meet local bond interest payment due on Thursday, traders said.
After going sideways, the dollar headed higher in the afternoon following rebounds in Chinese stocks and premarket U.S. stock index futures, approaching ¥109.60 at one point.
After European players joined dollar-yen transactions, position-squaring selling hit the U.S. currency amid a growing wait-and-see sentiment ahead of the end later in the day of the U.S. Federal Reserve’s two-day Federal Open Market Committee meeting.
“The U.S. central bank is unlikely to make an announcement about the start of tapering of quantitative easing after the FOMC meeting,” an official at a foreign exchange margin trading service firm said. “But it cannot be ruled out that the Fed will take some action to pave the way for the start.”
“Another focal point is how the Fed’s dot plot will signal an interest rate hike,” a major bank official said.
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