The dollar was stuck in a narrow range around ¥102.80 in Tokyo trading Wednesday as a wait-and-see mood grew before U.S. Federal Reserve Chairman Ben Bernanke’s closely watched congressional testimony later in the day.
At 5 p.m., the dollar stood at ¥102.79-80, up from ¥102.73-74 at the same time Tuesday. The euro rose above ¥133 for the first time in more than three years before being quoted at ¥132.95-97 at 5 p.m., up from ¥132.29-31, and at $1.2934-2935, up from $1.2877-2879.
In early trading, the dollar was weak below ¥102.50 after it was hit by selling in overseas trading overnight after St. Louis Fed President James Bullard, known for his hawkish stance, suggested that the U.S. central bank should continue its asset purchase program.
The dollar later attracted buying after Japanese data showed that the country logged a customs-cleared trade deficit of ¥879.9 billion in April, the largest deficit for the month and the 10th straight month of deficit.
The dollar briefly topped ¥102.60, also aided by a rise in Japanese stocks and dollar purchases by Japanese importers, market sources said.
The dollar later fell below ¥102.50 after news that the Bank of Japan kept its monetary policy unchanged at a two-day policy-setting meeting that ended Wednesday.
The BOJ’s decision had been widely expected. But “some investors moved to sell the dollar to buy the yen as the central bank did not launch any measure aimed at holding down long-term interest rates,” an official at a foreign exchange broker said. After resisting a further fall, the dollar moved in a narrow range around ¥102.50.