LONDON: The dollar eased versus the yen on Wednesday but held above a recent two-week low as investors awaited hints from the U.S. Federal Reserve on the timing and pace of future interest rate increases.
Ahead of the Fed’s policy statement due at 1800 GMT, trading could be swayed by month-end related flows, with Wednesday being the last trading day for settlement before the month end, traders said.
The dollar eased 0.1 percent to 123.49 yen, but still held above a two-week low of 123.01 yen set on Monday.
Against a basket of major currencies, the dollar last traded at 96.648 . The greenback had set a two-week low at 96.288 on Monday but has since pulled up from that trough.
“We expect the Fed to refrain from a clear indication on the timing of the Fed’s rate hike. We still expect a hike in September,” said Tohru Sasaki, the head of forex research at JPMorgan Chase Bank in Tokyo.
Sasaki also said the dollar/yen is unlikely to move much if the Fed does steer clear of dropping clear hints on its rate hikes, noting that dollar/yen has not shown any big reaction to the Fed’ policy statement this year.
