Dollar hits 7-week high on solid U.S., Japanese stocks

The U.S. dollar briefly climbed to its highest level against the yen in one and a half months Tuesday in Tokyo as solid U.S. and Japanese stock markets boosted investors’ risk appetite.

At 5 p.m., the dollar fetched 111.07-09 yen compared with 110.79-89 yen in New York and 110.40-41 yen in Tokyo at 5 p.m. Monday. It moved between 110.84 yen and 111.20 yen during the day, changing hands most frequently at 110.99 yen.

The euro was quoted at $1.1745-1746 and 130.45-49 yen against $1.1746-1756 and 130.17-27 yen in New York and $1.1769-1770 and 129.93-97 yen in Tokyo late Monday afternoon.

Inheriting its upward momentum from New York overnight, the dollar maintained firmness through much of the day and hit a seven-week high of 111.20 yen, as investors unloaded the yen, perceived as safe-haven asset, amid improved market sentiment supported by solid shares in New York and Tokyo, dealers said.

“The dollar (buying) immediately followed the rise in Tokyo stocks as the excessive risk-averse mood in the market receded” in the absence since Friday of new tariff threats being exchanged between the United States and China, said Kengo Suzuki, chief foreign exchange strategist at Mizuho Securities Co.

By the close of trading Tuesday, the Nikkei Stock Average had risen nearly 650 points over the previous three trading days.

The U.S. currency also gained ground on a rise in 10-year U.S.Treasury yields during off-hours trading while some Japanese importers sought the dollar for settlement purposes, dealers said.

Mizuho’s Suzuki said the dollar may have limited room for further gains without fresh, strong trading cues as “dollar-buying on higher bond yields based on the firm U.S. economy would be offset by selling on U.S.-China trade concerns.”

The euro also temporarily rose to its highest level in one and a half months of around 130.59 yen, as “traders also unloaded the safety of the yen just like they did against the dollar amid a relatively risk-on mood,” Suzuki added.

This article provided by NewsEdge.