The dollar was moderately weaker below ¥102 in Tokyo trading Wednesday, with a wait-and-see mood growing before the release later in the day of the minutes of last month’s U.S. Federal Reserve policy-setting meeting.
At 5 p.m., the greenback was at ¥101.65-66, down from ¥101.80-81 at the same time Tuesday. The euro was at $1.3614-3614, up from $1.3591-3591, and at ¥138.40-41, up from ¥138.35-37.
In early trading, the dollar was weak around ¥101.50-55 following overnight falls in U.S. equities and long-term interest rates.
The dollar was hit by renewed selling and dropped to around ¥101.45 after Tokyo stocks opened lower. But the dollar resisted a further fall as stocks trimmed their earlier losses.
“The dollar attracted purchases by Japanese importers,” an official at a foreign exchange brokerage said.
The dollar later stayed solid at levels above ¥101.50 as Tokyo stocks showed resilience toward the close.
“Because Tokyo stocks’ losses were limited, dollar-yen trading lacked a clear direction,” an official at a major foreign exchange margin trading service firm said.
Investors were seen retreating to the sidelines to await the upcoming release of the minutes of the Fed’s Federal Open Market Committee meeting for June 17 and 18.
Many market participants hope to check the content of the minutes and subsequent moves of U.S. shares and interest rates, the foreign exchange brokerage official said.
Even if the minutes show a hawkish stance on the Feb’s interest rate policy, the dollar may face selling if U.S. stocks lose ground, an official at another foreign exchange margin trading service firm said, suggesting that investors are finding it difficult to step up dollar buying for now.
With the dollar slipping below its 200-day moving average, which currently is around ¥101.70, a technical chart suggests that the greenback may test its downside, one market source said.