The dollar rose to around ¥110.20 at one point in Tokyo trading Tuesday, surpassing the ¥110 line for the first time in around eight months amid growing expectations for better trade ties between the United States and China.
At 5 p.m., the dollar stood at ¥109.98-98, up from ¥109.57-57 at the same time Friday. The euro was at $1.1141-1142, up from $1.1106-1108, and at ¥122.54-54, up from ¥121.70-71. The Tokyo market was closed Monday for Coming of Age Day.
The dollar attracted buying after the United States dropped its designation of China as a currency manipulator on Monday, just two days ahead of the two economies’ scheduled signing of a “phase one” trade deal.
Also buoyed by real demand-backed buying after the three-day weekend, the U.S. currency topped ¥110 in the early morning and went up to around ¥110.20 later in the morning. The greenback lost steam and fluctuated in a narrow range above the ¥110 line before coming under increased selling pressure in late afternoon trading.
The dollar failed to extend gains in the afternoon because “concerns over U.S.-China trade and the Middle East situation linger,” an official at a bank affiliated securities firm said.
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