Dollar sheds gains in Tokyo after rising above ¥112

The dollar shed gains versus the Japanese currency Tuesday in Tokyo after earlier rising above ¥112 on firmer stock markets in and outside Japan.

At 5 p.m., the dollar stood at ¥111.63-63, still up from ¥111.45-46 at the same time Monday. The euro was at $1.1187-1187, down from $1.1200-1200, and at ¥124.88-89, up from ¥124.82-84.

The dollar fluctuated around ¥111.80 in early trading, drawing purchases following higher European and U.S. equities and a rise in U.S. long-term interest rates overnight, traders said.

In late morning trading, the U.S. currency briefly topped ¥112 for the first time in about a month, as the Nikkei 225 stock average gained further ground.

But the dollar met with profit-taking and position-adjustment selling in the afternoon, retreating to around ¥111.60, according to the traders.

A wait-and-see mood intensified in late trading prior to a speech by U.S. Federal Reserve Chairwoman Janet Yellen later Tuesday.

The focus is whether Yellen will continue to show her hawkish view on interest rate hikes ahead, the traders said.

The dollar could retake ¥112 if she expresses her confidence that the Fed will be able to raise interest rates one more time this year and start trimming its balance sheet soon, said an official of a bank-affiliated securities firm.

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