Dollar selling and yen selling continued in the London market, dampening expectations for early additional rate hikes by the central banks of Japan and the United States. Comments from Tokyo avoided referring to a specific timing for rate hikes, and the lead shifted to trading activity in London.
Dollar selling and yen selling continued in the London market. Fed Chair Warsh's avoidance of comments on the direction of policy affected the market on the view that it had reduced expectations for early additional rate hikes. In a speech by Bank of Japan Governor Ueda in Tokyo in the afternoon, he maintained the previous stance on rate hikes, but offered little that was new.
Among the currency pairs traded, euro-dollar rose from the low 1.12 range to the high 1.12 range, while pound-dollar rose from the high 1.32 range to the mid-1.33 range. Euro-yen rose from the low 177 range to the high 177 range, and pound-yen rose from the high 209 range to the high 210 range. Dollar-yen continued to fluctuate narrowly around ¥158.
The dollar index maintained its downward trend following the US CPI release and moved below its 10-day moving average. As participation in the London market picked up, the durability of further dollar selling became a focus for the market.
Dollar-yen traded mainly in the high ¥157 range, with the range generally around 157.80–158.18. Trading remained directionless due to a lack of substantive comments from both Tokyo and London.