TOKYO, Oct 10: The dollar shed earlier gains in afternoon trading on Wednesday after facing strong resistance around the 120.70-yen level, dealers said.

The greenback traded at 120.47-49 in Tokyo Wednesday against 120.12 yen in New York and 120.10-13 yen in Tokyo late Tuesday.

Earlier in the day, the dollar climbed steadily to a high of 120.58 yen.

In the morning hours, those who had sold the dollar bought back the currency because it hadn’t fallen that much (despite the US-led strikes in Afghanistan), said Kazuhiro Kaneko, foreign exchange dealer at Mizuho Trust Bank.

In the afternoon the (dollar) tried 120.70 yen, but it faced massive sell orders around that level and was unable to break through the resistance, he said.

Investors then turned sellers pushing the dollar down against the yen, Kaneko said, adding it was likely to remain in its current range for the time being.

However Asahi Bank trader Nobuaki Tani said the US currency would continue to suffer the negative impact of last month’s terrorist attacks in the US.

Our view that the dollar will have a difficult time strengthening this week hasn’t changed, Tani said.

The euro bought $0.9125-28 compared with $0.9125 in New York and $0.9210-13 in Tokyo late Tuesday.—AFP