Yen hands back gains, dollar waits on CPI
The dollar rose about 0.9% on the yen overnight. At 145.96 yen it is about 3% above a low touched last week after remarks on the challenging outlook from Bank of Japan Governor Kazuo Ueda were taken as a hint that a policy shift was imminent.
Bloomberg reported on Monday, citing sources, that BOJ officials see little need to rush out of negative rates, triggering a reversal of the yen's rally and gains in Japan's stock and government bond markets.
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«Wages growth is still weak,» Commonwealth Bank of Australia analyst Kristina Clifton pointed out in a note.
«We do not expect the BOJ to end negative interest rates until Q2 24 at the earliest… The wide differential between U.S. and Japanese 10-year government bond yields can continue to support dollar/yen.»
Other currency pairs were broadly steady with the euro at $1.0765 as the market focus turns on U.S.
inflation data, due at 1330 GMT, and beyond it to Wednesday's Federal Reserve policy decision.
Sterling held at $1.2555.
The Australian dollar, floated four decades ago on Tuesday, was kept to $0.6564 and the New Zealand dollar to $0.6122.
The dollar has been sliding since October's benign U.S. inflation report but found a footing on upbeat jobs data published on Friday.
