LONDON: The U.S. dollar traded narrowly at the lower 121 yen level Thursday morning in Tokyo, slightly off its two-month high hit overnight, as market players awaited the outcome of a Bank of Japan policy meeting through Friday.
At noon, the dollar fetched 121.14-15 yen compared with 121.33-43 yen in New York and 120.95-97 yen in Tokyo at 5 p.m. Wednesday.
The euro was quoted at $1.1123-1123 and 134.74-76 yen against $1.1087-1097 and 134.54-64 yen in New York and $1.1100-1101 and 134.26-30 yen in Tokyo late Wednesday afternoon.
The dollar’s rally took a respite after the currency hit a two-month high of 121.49 yen overnight in New York, backed by growing optimism over the outlook for the U.S. economy.
Yuji Kameoka, chief foreign exchange analyst at Daiwa Securities Co., said the closely watched minutes of the latest U.S. Federal Reserve policy meeting did not set a clear trend for the dollar-yen pair as it contained no major surprises.
The minutes showed Wednesday that many U.S. monetary policymakers believed as of late April that it would be premature to start raising interest rates in June.
“There was already a market consensus that there will be no rate hike in June,” he said.
Market players are keeping close tabs on the BOJ’s two-day policy meeting through Friday after the Nikkei business daily said the central bank may reassess the state of the domestic economy in light of strong first-quarter growth and signs of a rebound in consumer spending.
The euro rose slightly against the dollar and the yen, paring some of its recent losses triggered by the European Central Bank’s reported plan to front-load its bond buying program in May and June.
