But the dollar will remain top-heavy due to lingering concerns over an eventual end of the zero interest rate policy in Japan and uncertainty over the prospect for the Chinese yuan. |
Dollar selling, spurred by rising expectations that U.S. rate increases have peaked, remains intact. |
Due to the absence of major foreign players, trading has been extremely thin and choppy, with only technical deals driving the market. |
In the near-term, the euro seems to be hostage to downside risks against the Japanese yen due to growing interest for Asian currencies as a whole, and this is likely to weigh on the euro against the dollar. |
Iran is a worrying issue that could trigger dollar selling. |
It seems that the ECB is now in a wait-and-see mode following the rate hike in December, which means that interest rate differentials between the US and Europe will not start narrowing (any time soon). |
Many Japanese importers will have their last business day of the year on Wednesday. They needed the dollar for the year-end settlements of their businesses. |
Such reports apparently pushed down the dollar. The market has entered a correction phase and the U.S. currency may fall by another full yen. |
The dollar was a little affected by the talk but soon retreated. |
The headline figure was only in line with expectations and therefore it did not have any impact on market perceptions about near-term monetary policy management by the Bank of Japan. |
The market had expected stronger inflationary pressures, so it was natural that players pared back some of their long dollar positions. |
The unexpectedly strong result is likely to prompt yen buying particularly from foreign investors who take it as a sign that Japan's structural reforms will make progress. |