Pence remark forces dollar to cut gains in late Tokyo trading

The dollar pared early gains to move around ¥108.80 in late Tokyo trading Tuesday, dampened by a remark by visiting U.S. Vice President Mike Pence.

At 5 p.m., the dollar stood at ¥108.86-86, still up from ¥108.32-32 at the same time Monday. The euro was at $1.0649-0651, up from $1.0638-0638, and at ¥115.94-94, up from ¥115.23-23.

The dollar carried over its firmness from overnight trading overseas, where it attracted demand thanks to U.S. Treasury Secretary Steven Mnuchin’s comment in a press interview suggesting that the administration of President Donald Trump favors a strong dollar in the long run.

The greenback briefly topped ¥109.20 on buybacks in the morning, also aided by Tokyo stocks’ spurt following a sharp rebound on Wall Street on Monday and rises in U.S. long-term interest rates, market sources said.

But after hovering above ¥109, the dollar sank close to ¥108.80 in the late afternoon, as investors renewed buying of the safe-haven yen versus the U.S. currency in the wake of Pence telling Prime Minister Shinzo Abe that peace can only be achieved by force, market sources said. The remark was made in connection with North Korea.

The dollar was also pressured by a drop in U.S. interest rates, the sources said.

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