Dollar edges lower against euro as markets trim rate hike bets
TLT•Yen weakens as focus turns to BoJ
Joint efforts by the U.S. and Japan to stem the slide in yen have also set up a delicate backdrop for currency markets and the focus has shifted to whether the Bank of Japan will raise rates soon.
The yen JPY=EBS pared early gains and was last down 0.11% to around 159.49 per dollar, brushing aside weaker-than-expected Japanese economic growth data. Japanese and U.S. authorities intervened in currency markets in late July to stem the yen's weakness.
The dollar index, which measures the greenback against a basket of other major currencies, recouped losses after falling to its lowest since early June =USD. It was last flat at 99.60.
"While the market is pricing in a sharper BoJ rate hiking cycle, USD/JPY could trade higher on the back of strong global risk sentiment and elevated US terminal rate pricing despite a modest US inflation print," said Morgan Stanley analysts led by David Adams in an investor note.
