TOKYO: The U.S. dollar fell slightly to the mid-118 yen zone Thursday morning in Tokyo, with its topside capped by retreating hopes for an early interest rate hike in the United States following the release overnight of U.S. Federal Reserve minutes.
At noon, the dollar fetched 118.57-58 yen compared with 118.73-83 yen in New York and 119.17-18 yen in Tokyo at 5 p.m. Wednesday.
The euro was quoted at $1.1422-1423 and 135.44-45 yen against $1.1392-1402 and 135.33-43 yen in New York and $1.1388-1389 and 135.71-75 yen in Tokyo late Wednesday afternoon.
The dollar fluctuated narrowly before weakening slightly in midmorning in step with a pause in the rise of the Nikkei Stock Average, which had hit an around 15-year high immediately after the opening, dealers said.
The U.S. currency had dropped into the 118 yen range overnight in New York in the wake of the release of the minutes of the Fed’s policy meeting in January, which many market participants perceived as signaling Fed policymakers’ reluctance to raise the short-term interest rate.
“Amid growing expectations of an early rate hike stemming from strong U.S. labor report for January, the dollar was sold on the less-hawkish-than-expected minutes,” said Kengo Suzuki, chief foreign exchange strategist at Mizuho Securities Co.
The minutes said many participants in the Jan. 27-28 meeting of the Federal Open Market Committee were concerned that “a premature increase in rates might damp the apparent solid recovery in real activity and labor market conditions.”
