LONDON: The dollar bounced to cut steep losses versus the yen on Wednesday as Tokyo shares rebounded after sharp losses, dulling demand for the safe-haven Japanese currency for the timebeing.
The US currency fared better against commodity currencies like the Australian and Canadian dollars, put on the defensive as crude oil prices resumed falling.
The dollar was up 0.7 per cent at 120.175 yen, hoisted up from a low of 119.225 as Tokyo’s Nikkei gained 0.8 percent following the previous day’s 3.8 per cent tumble.
The greenback was still sharply lower from its overnight high of 121.265 against its Japanese peer, which tends to attract bids in times of financial market turmoil.
The dollar’s bounce forced the euro to fall back 0.3 per cent to $1.1275. The common currency rallied 0.9 per cent on Tuesday when it went as high as $1.1332.
“The dollar fell against the yen early in the session, apparently led by foreign players’ selling, but it rebounded as shorts were covered when long-term funds came in and shored up the Nikkei,’’ said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.
“But a drop by Shanghai shares has slowed the Nikkei’s rise, preventing a further rebound by dollar/yen. For currencies, its about watching stocks lately,’’ Ogino said.
