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The dollar eased below ¥110 in lackluster Tokyo trading Wednesday ahead of U.S. Federal Reserve Chairman Jerome Powell’s news conference and new interest rate projections by U.S. policymakers.

At 5 p.m., the dollar stood at ¥109.93, down from ¥110.04 at the same time Tuesday. The euro was at $1.2132, down from $1.2144, and at ¥133.38, down from ¥133.61.

The dollar moved mostly in a tight range slightly above ¥110.00, with many players taking to the sidelines to wait for the news conference to be held after the end of a two-day meeting of the Fed’s Federal Open Market Committee later on Wednesday.

The dollar fell past the threshold in late afternoon trading, on the heels of buying of the British pound gaining strength against the greenback following the release of the European country’s higher-than-expected inflation rate for May.

In addition, some investors are believed to have moved to square dollar-long positions prior to the announcement of the outcome of the FOMC meeting, according to a currency broker.

Especially attracting attention were whether the Fed chief would signal the start of quantitative easing tapering discussions and whether projections for an interest rate hike in 2023 by FOMC members would increase.

Meanwhile, a Japanese bank official downplayed the possible impact of the Fed’s policy-setting meeting on the dollar-yen pair, saying, “The policymakers’ hawkish turn has already been factored in to a certain extent.”

“Besides, many players have been thinking it’s ‘only a matter of time’ before the Fed starts tapering bond purchases,” the official went on to say.

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