Yen gives back some gains, dollar rebounds before US CPI
By Samuel Indyk and Rae Wee
LONDON (Reuters) — The yen slipped on Tuesday after its biggest daily rise since mid-July the day before as comments from Japan's top central banker on a possible end to its negative interest rate policy reverberated throughout markets.
The dollar, meanwhile, regained lost ground after clocking its biggest daily fall since July 13, while the pound slipped after mixed labour market data.
Bank of Japan (BOJ) Governor Kazuo Ueda told a newspaper interview over the weekend the bank could get enough data by year-end to determine whether it can end negative rates, remarks that on Monday saw the yen clock its largest daily gain against the dollar since July 12.
The Japanese currency was last 0.1% lower at 146.71 per dollar, after scaling a one-week top of 145.91 in the previous session.
«Ueda's comments were a little more balanced than you would have thought from the market reaction,» said Adam Cole, chief currency strategist at RBC Capital Markets.
«Japan is still a long way from meeting the criterion of sustainable 2% inflation and the comments don't really change much for me,» Cole added.
The yen has come under immense pressure against the dollar as a result of growing interest rate differentials with the United States, since the Federal Reserve began its aggressive rate-hike cycle last year while the BOJ remains a dovish outlier.
Taking a different view, however, Japan's senior ruling party official Hiroshige Seko said on Tuesday he took Ueda's remarks as meaning that the central bank will continue with monetary easing.
Elsewhere, the U.S. dollar reversed some of its losses from the previous session, with the euro falling 0.3% to $1.0718 after touching a one-week high of $1.0771 before
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