The dollar traded in a narrow range around ¥97.50 in Tokyo trading Tuesday as a wait-and-see mood grew before a closely watched U.S. Federal Reserve monetary policy meeting.
At 5 p.m., the dollar stood at ¥97.48-49, down from ¥97.57-58 at the same time Monday. The euro was at $1.3775-3777, down from $1.3810-3810, and at ¥134.30-33, down from ¥134.75-82.
After moving around ¥97.70 in early trading, the dollar came under selling pressure and fell below ¥97.50 at one point in line with falls in Tokyo stock prices.
As stocks cut their early losses, the dollar resisted falling further and rose back to around ¥97.50-60.
With position-adjustment moves dominating the foreign exchange market, dollar-yen trading was range-bound at around ¥97.50 in the absence of fresh trading clues, market sources said.
“Investors find it difficult to take fresh positions” before the Fed’s two-day Federal Open Market Committee meeting, which was to start later Tuesday, a major Japanese bank official said.
As the Fed is widely believed to maintain its current quantitative easing, market participants have already factored in such a scenario, an official at a major trust bank said.
Against this background, market attention is focused on a statement to be issued after the FOMC meeting.
“Considering the recent government shutdown’s negative effects on the U.S. economy and weak readings in the U.S. government jobs report for September, the U.S. central bank cannot mention the start of tapering its quantitative easing,” an official at a foreign exchange margin trading service provider said.