The dollar slumped to levels around ¥109.60 in Tokyo trading Tuesday, dragged down by the fall in the Nikkei 225 below the 20,000 mark.
At 5 p.m., the dollar stood at ¥109.62-63, down from ¥110.52-53 at the same time on Monday. The euro was at $1.1250-1250, down from $1.1264-1265, and at ¥123.32-39, down from ¥124.50-51.
The dollar hovered in a narrow range around ¥110.50 in overnight trading in New York, where a wait-and-see mood spread ahead of this week’s key events, including a general election in Britain and a U.S. Senate hearing with former FBI Director James Comey.
The U.S. currency, however, came under selling in Tokyo trading as Japanese stocks suffered a setback following their recent rapid ascent. The dollar fell below ¥109.70 for the first time since April 25.
“The dollar’s fall was triggered by real demand-backed selling against the yen and also apparently attributable to speculative trading for short-term gains,” an official at an asset management firm said.
A fall in long-term U.S. Treasury yields in off-hours trading also pressured the dollar’s topside, traders said.