The dollar traded in a narrow range around ¥101.60 in Tokyo trading Wednesday, with market players refraining from aggressive moves before the release of a policy statement by the U.S. Federal Reserve.
At 5 p.m., the dollar stood at ¥101.57-58, down from ¥101.64-65 at the same time Tuesday. The euro was at $1.3922-3923, up from $1.3914-3915, and at ¥141.41-43, against ¥141.44-47.
After moving around ¥101.40 in early morning trading, the dollar came under selling pressure as Tokyo stocks turned lower.
The dollar was trapped in a narrow range below ¥101.50 in midmorning trading as players retreated to the sidelines to await the outcome of the Fed’s two-day Federal Open Market Committee meeting that would end later in the day.
The dollar later attracted purchases and rose above ¥101.60 at one point after the Nikkei average turned higher in the afternoon.
But the dollar grew top-heavy, affected by uncertainties over the crisis in Ukraine.
“The dollar’s topside has been pressured by the Ukraine crisis,” an official at a major foreign bank said.
Still, market sources said that many players believe that the crisis will not lead to a further division of Ukraine or a military clash even though Russian President Vladimir Putin announced Moscow’s decision to annex Crimea in a speech on Tuesday.
“Due to the need to assess effects on the market of further U.S. and European sanctions against Russia, investors find it difficult to take a ‘risk on’ stance for now,” an official at a foreign exchange margin trading service provider said.