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The dollar’s upside was capped at levels above ¥120 in Tokyo trading on Wednesday, with a wait-and-see mood growing ahead of a monetary policy decision by the U.S. Federal Reserve.

At 5 p.m., the dollar stood at ¥120.25-25, up from ¥119.59-60 at the same time Tuesday. The euro was at $1.1264-1268, down from $1.1307-1307, and at ¥135.46-47, up from ¥135.22-24.

The dollar was firmer around ¥120.30-40 in early morning trading, attracting buybacks on the back of overnight rises in U.S. stock prices and long-term interest rates.

The U.S. currency rose to near ¥120.50 after Tokyo stocks got off to a solid start.

After Tokyo stock prices gave up some of their early gains and became top-heavy in the afternoon, the dollar came under selling pressure and fell below ¥120.30.

“The dollar was also dampened by a fall in U.S. interest rates in off-hours trading,” an official at a currency brokerage firm said.

Still, the dollar resisted losing further ground since investors retreated to the sidelines before closely watched U.S. economic events, including the release later on Wednesday of the consumer price index for August and the two-day meeting of the Fed’s policy-setting Federal Open Market Committee through Thursday, market sources said.

“Market players found it difficult to trade aggressively” before the CPI announcement and the Fed meeting, an official at a major Japanese bank said, suggesting that the dollar-yen rate is expected to be range-bound for now.

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