The yen fell 0.3% to 155.16 per dollar, edging away from its
peak of 151.86 hit last week on the back of suspected intervention from
Japanese authorities to prop up the sliding currency.
Analysts have said that any intervention from Tokyo would
only serve as a temporary respite for the yen, given stark interest rate
differentials between the U.S. and Japan remain.
Bank of Japan Governor Kazuo Ueda said on Wednesday the
central bank may take monetary policy action if yen declines affect prices
significantly, while the country's finance Minister Shunichi Suzuki repeated a
warning that authorities were ready to respond to excessively volatile moves in
the currency market.
“If we were to see a sudden, sharp move up in dollar/yen
then I would expect them to step into the market to support the yen. But if we
continue to see a gradual move up, I doubt they’ll come in, but there’s
obviously a risk,” said Carol Kong, a currency strategist at Commonwealth Bank
of Australia.
The euro fell 0.13% to $1.0741, while the New Zealand dollar
edged 0.17% lower to $0.5992.
Against a basket of currencies, the greenback rose 0.12% to
105.55, pushing some distance away from a roughly one-month low it hit last
week.
Investors continue to be focused on the pace and timing of
Fed rate cuts that will likely drive currency moves, with the latest
weaker-than-expected U.S. jobs data and an easing bias from the U.S. central
bank cementing expectations that rates will likely be lower by the end of the
year.
While Minneapolis Fed President Neel Kashkari said on
Tuesday it is too soon to declare that inflation has definitely stalled out,
that did little to move the needle on market pricing for rate cuts.
“The market brushed off comments from Minneapolis Fed
President Kashkari, who sits at the hawkish end of the spectrum and is a
non-voter this year,” said Rodrigo Catril, senior FX strategist at National
Australia Bank.
Elsewhere, sterling eased 0.18% to $1.2487, ahead of the
Bank of England’s policy decision on Thursday, where focus will be on how soon
the central bank could begin cutting rates.
Analysts expect the central bank to leave the door open to
lower interest rates as early as June.
The Australian dollar fell 0.33% to $0.65765, pressured in
part by a less hawkish outlook from the Reserve Bank of Australia than
anticipated after it held interest rates steady on Tuesday. -Reuters
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