The dollar drifted slightly above ¥102.70 in Tokyo trading Tuesday, with traders awaiting key overseas events that will take place amid heightened concerns about emerging economies.
At 5 p.m., the dollar stood at ¥102.77-79, against ¥102.68-70 at the same time Monday. The euro was at $1.3664-3664, against $1.3687-3690, and at ¥140.42-45, against ¥140.55-58.
Flight from riskier assets triggered by recent plunges of currencies in emerging economies has run its course, and the currency market has returned to calm for now, traders said.
Still, market players remained vigilant about developments related to emerging economies.
“It’s just that an excessive risk-off sentiment has receded,” an official at a currency brokerage said.
Traders were focusing on an emergency meeting of the Turkish central bank to be held later Tuesday. Japanese investors will have learned the outcome of the meeting by early Wednesday.
The Turkish lira rebounded sharply from its record low levels after Monday’s announcement of the holding of the emergency meeting.
But the risk-averse sentiment could spread again if the Turkish central bank fails to hammer out satisfactory market stabilization measures, an official at a major foreign-affiliated bank said.
Players are also paying close attention to a Federal Open Market Committee meeting of the U.S. Federal Reserve to be held for two days starting Tuesday.
The Fed was set to discuss whether to continue cutting back on bond purchases. At the FOMC meeting last month, the U.S. central bank decided to taper its quantitative easing by reducing its monthly bond purchases from $85 billion to $75 billion.