News Column

Dollar steady in lower 101 yen range before Fed, BOJ events

July 13, 2014

The U.S. dollar held steady in the lower 101 yen range Monday morning in Tokyo as traders awaited major events such as a Bank of Japan policy meeting and U.S. Federal Reserve Chair Janet Yellen's testimony in Congress.

At noon, the dollar fetched 101.35-43 yen compared with 101.32-42 yen in New York and 101.36-37 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.3603-3604 and 137.87-90 yen against $1.3602-3612 and 137.92-138.02 yen in New York and $1.3604-3606 and 137.89-93 yen in Tokyo late Friday afternoon.

Concerns over the financial health of a major Portuguese bank have mostly receded, but the dollar's movement was limited as the Bank of Japan was due to begin a two-day meeting later Monday, dealers said.

"It's hard to imagine the BOJ will drastically change its stance at the meeting, and Governor (Haruhiko) Kuroda remains confident about the bank's inflation outlook, so expectations of further easing are likely to remain subdued," said Yuzo Sakai, manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow.

The central bank will release an interim assessment of its semiannual report on the outlook of economic conditions and inflation in Japan on Tuesday.

Fed chief Yellen testifies before the U.S. Senate Banking Committee on Tuesday and the House Committee on Financial Services the following day.

"If Chair Yellen adopts a less dovish stance in her testimony, it could push up U.S. interest rates and prop up the dollar against the yen. But that also seems unlikely," Sakai said.

The euro was little changed from its levels Friday in New York, having partly recovered from a drop on the Portugal worries which led market players to turn to the relative safety of the yen.

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Source: Japan Economic Newswire

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