The dollar trimmed losses against the yen Because strengthening Nikkei Index

The US dollar strengthened to reduce their sharp losses against the yen on Wednesday as the Tokyo stock market rebounded after a sharp drop in the previous session, reducing demand for safe-haven currencies such as the yen at the moment.

The US currency fared better than commodity currencies like the Australian dollar and the Canadian dollar, which is now increasingly weakened as oil prices back down.

The dollar rose 0.7% at 120.17 yen, slightly higher than the lowest level at 119.22 as the Nikkei index gained about 0.4% after the fall of 3.8% in the previous session.

The greenback is still lower than the highs overnight at 121.26 against the Japanese currency, which typically looks attractive when the financial market turmoil.

Strengthening dollar also forced the euro to back down about 0.3% to $ 1.1275. The currency of the Euro zone region rallied 0.9% on Tuesday when they touched the highest level at $ 1.1332.

Currency analyst at research firm in Tokyo said the dollar fell back against the yen earlier in the session, apparently caused by a sell-off by foreign investors, but then rebounded on short covering when the flow of investment funds into the stock market to prop up equities.

However, the decline in the Shanghai index also slowed Nikkei rally, prevent further rebound in the dollar / yen. For the currency, now we have to look at the movement of equity markets.