Dollar steady ahead of key US inflation data, yen retraces gains
dollar was broadly steady on Wednesday ahead of a key U.S. inflation report later in the day, though it rose on the yen as traders assessed comments from Japan's top central banker on a possible early exit from its negative interest rate policy.
The U.S.
currency advanced around 0.2% to 147.36 against the yen, which retraced its biggest one-day percentage rise in two months on Monday, following the remarks from Bank of Japan (BOJ) Governor Kazuo Ueda over the weekend.
As investors have more time to consider Ueda's comments, «the fundamental driver of the upside pressures on yen» have returned, said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.
«I think the market also is reading the statement more carefully. The statement to our mind was quite a conditional one, (Ueda) didn't promise anything.»
Influential ruling party lawmaker Hiroshige Seko on Tuesday also signalled his preference for ultra-loose monetary policy, after Ueda's comments pushed up the yen and bond yields.
The yen has been under relentless pressure against the dollar as the BOJ remains a dovish outlier among global central banks, especially since the Federal Reserve began its aggressive rate-hike cycle in March 2022.
In the broader currency market, the dollar stood firm, though moves were subdued as traders stayed on guard ahead of the closely-watched U.S.
inflation reading out later on Wednesday.
Sterling slipped 0.01% to $1.2482, while the Australian dollar fell 0.04% to $0.64015.
The U.S. dollar index measure against a basket of key rivals was last steady at 104.67, after slipping to a one-week low on Monday and clocking its largest daily fall in two months.
Analysts attributed the slide to an unwinding of long dollar positions, after a
