The U.S. Dollar inched up versus the Japanese Yen during Friday’s Asian trading session but investors says that the greenback remains subdued as they ponder what the Federal Reserve’s next move might be given recent economic data. The Dollar also gained support from the Bank of Japan’s announcement that it would maintain monetary policy at current levels, but as FX traders had already priced in such an eventuality the dollar’s gains relative to the Yen are likely to be limited. The Bank of Japan’s governor said that they were working toward achieving a 2% inflation target by April 2015 and that has led some traders to alter expectations of any BOJ easing for this year.
As reported at 11:35 a.m. (JST) in Tokyo, the USD/JPY was trading at 101.79 Yen, a gain of 0.1% but still not far from Thursday’s trough at 101.60 Yen. The pair had initially risen to a session peak at 101.83 Yen but once the BOJ made its announcement the pair quickly dipped. The EUR/JPY also edged higher to 137.99 Yen, a gain of 0.1%.
Investors Ponder Central Bank Differences
The EUR/USD was trading at $1.3556, holding close to last week’s 4-month trough at $1.3503; this in the wake of the ECB’s announcement of numerous measures to encourage Eurozone growth. The differential between policy stances at the European Central Bank and the Federal Reserve in the U.S. could provide most of the action as investors weigh the possibility that the Fed still could surprise at next week’s policy meeting.