The safe-haven yen fell versus its peers on Wednesday as risk appetite marginally improved in Asian trading, though concerns over slowing global growth and U.S.-Sino trade tensions are likely to cap gains in riskier assets.
As expected, the Bank of Japan kept monetary policy unchanged and trimmed its inflation forecast, with a larger-than-expected drop in December export data earlier in the day underlining the need for continued support for the trade-reliant economy.
The dollar index was marginally higher at 96.32. Traders in interest rate futures are wagering that the Federal Reserve will stand pat on rates in 2019 in the face of risks both at home and globally.
The New Zealand dollar gained 0.5 percent in early Asian trade to $0.6780 after data showed that inflation edged higher in the fourth quarter and reducing the possibility of an interest rate cut.
The dollar fell against the Japanese yen on Tuesday, as worries about flagging global growth and concerns about continuing U.S.-Chinese trade tensions drove investors to seek out safe-haven assets.
Sterling jumped to a 2-month high against the euro on Tuesday after strong employment data suggested Britain’s labour market remained robust despite an economic slowdown ahead of Brexit.
The South African rand slipped on Tuesday, as fears about the health of the global economy dampened appetite for riskier emerging market assets.