Dollar weak around ¥101 in Tokyo on risk aversion

The dollar stayed on a weak note around ¥101 in Tokyo trading late Wednesday, as market players remained risk-averse due to economic concern in the wake of Britain’s vote last month to leave the European Union.

At 5 p.m., the dollar stood at ¥100.98-99, down from ¥101.74-74 at the same time Tuesday. The euro was at $1.1065-1065, down from $1.1154-1154, and at ¥111.74-74, down from 113.48-49.

The dollar moved around ¥101.20 in early trading due to safe-haven buying of the yen, reflecting rekindled concern over the global economy following Britain’s vote to exit the EU, or Brexit.

The greenback fell as low as around ¥100.60, after the 225-issue Nikkei stock average accelerated its downswing to tumble some 500 points in late morning trading.

The British pound plummeted below ¥130 at one point, hitting the lowest level since November 2012, with worries about the course of the British economy fueled by a halt to cancellations of U.K. real estate funds.

The risk-averse sentiment intensified further in the market after the People’s Bank of China lowered the yuan’s reference rate against the dollar to the lowest level in five years and eight months, traders said.

But the dollar rose back above ¥101 in the afternoon, following the British pound’s rebound above ¥130.

“No direct incentive was particularly seen,” an official at a Japanese bank said of the halt to dollar’s drop versus the yen. The dollar’s resilience seemed to be autonomous, traders said.

Many currency players are sensitive to the pound’s unstable movements, after economic concerns triggered by the Brexit vote spread to broader Europe and other areas in the world, an official at a Japanese securities firm said.

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