Greenback inches slightly higher


The dollar lacked direction against the yen in Tokyo on Thursday ahead of major events, while the euro weakened on dwindling risk appetite in financial markets.

At 5 p.m., the dollar was quoted at ¥93.45-47, up from ¥93.35-36 at the same time Wednesday. The euro stood at $1.3258-3260, down from $1.3408-3409, and at ¥123.92-93, down from ¥125.16-19.

The dollar held firm above ¥93.50 in the morning after rising above ¥94 briefly in New York overnight on speculation that the U.S. Federal Reserve may slow or stop its asset purchases, traders said.

But the greenback trimmed much of its gains in the afternoon as equity prices in Japan and other Asian markets weakened, they said.

The minutes of the Fed’s Jan. 29-30 meeting, released Wednesday, showed that many participants expressed “some concerns about potential costs and risks arising from further asset purchases.”

Speculation of an early change of course in U.S. monetary policy “prompts dollar purchases and yen sales, but the dollar will be held in check if stock prices are dampened” by the speculation, a major Japanese bank official said.

“Risk-off moves may grow strong if speculative positions that have been backed by U.S. monetary policy easing are unwound,” another Japanese bank official said.

Talks on the Fed’s exit strategy will support the dollar versus the yen over the medium term, as the Bank of Japan is set to ease its monetary policy further and interest rate differentials between the two nations are seen expanding, a foreign brokerage house official said.