On Wednesday, the dollar regained some ground following earlier losses driven by speculation of potential rate cuts by the Federal Reserve. Meanwhile, the yen weakened towards 155 per dollar, heightening concerns about intervention by Japanese authorities.
The offshore yuan retreated from its recent peak, supported by expectations of additional policy measures from Beijing to bolster the Chinese economy. Analysts noted that any intervention by Tokyo to support the yen would likely offer only temporary relief, given the significant interest rate differentials between the U.S. and Japan.
Bank of Japan Governor Kazuo Ueda emphasized the central bank's attention to yen movements' impact on inflation in guiding monetary policy. Additionally, Japan's Finance Minister Shunichi Suzuki reiterated readiness to respond to excessive volatility in the currency market.
Currency strategist Carol Kong of Commonwealth Bank of Australia suggested that Tokyo might intervene if there's a sudden, sharp increase in the dollar/yen pair but may not intervene for gradual movements.
The euro and New Zealand dollar both saw marginal declines, while the dollar remained stable against a basket of currencies, away from recent lows. Investor focus remained on the timing and pace of potential Fed rate cuts, fueled by weaker-than-expected U.S. jobs data and a dovish stance from the central bank.
Minneapolis Fed President Neel Kashkari's remarks on inflation did little to change market expectations for rate cuts, according to Rodrigo Catril, senior FX strategist at National Australia Bank.
Sterling dipped slightly ahead of the Bank of England's policy decision, with analysts anticipating a possible rate cut as early as June.
The Australian dollar weakened, partly due to a less hawkish outlook from the Reserve Bank of Australia following its decision to hold interest rates steady.
Paraphrasing text from "Reuters" all rights reserved by the original author.
