The dollar stayed solid above ¥98 in Tokyo trading Wednesday on rises in domestic and overseas stocks, but it failed to extend gains as investors retreated to the sidelines before the outcome of the U.S. Federal Reserve’s policy meeting is announced.
At 5 p.m., the dollar stood at ¥98.26-28, up from ¥97.48-49 at the same time Tuesday. The euro was at $1.3741-3742, down from $1.3775-3777, and at ¥135.02-03, up from ¥134.30-33.
In early trading, the dollar drew buying and rose to around ¥98.20, carrying over its strength from overnight trading overseas, where the greenback was chiefly supported by a surge in U.S. stock prices.
“The dollar attracted demand thanks to rises in U.S. and Japanese shares as well as other Asian equities,” an official at a bank-affiliated securities house said.
But the dollar failed to keep rising due to position-adjustment selling.
“The dollar’s topside was capped by selling to lock in profits,” an official at a foreign exchange broker said.
In the afternoon, the dollar was trapped in a narrow range above ¥98 as a wait-and-see mood grew before the announcement later in the day of the results of the Fed’s Federal Open Market Committee meeting.
“Although the dollar was solid thanks to the strength of the stock markets, there were no other incentives to buy the U.S. currency,” an official at a foreign exchange margin trading service firm said.
As the Fed is expected to put off tapering its quantitative monetary easing this time, market players await a statement to be issued after the meeting, traders said.