Yen weakens after intervention-led surge ahead of BOJ policy decision
SPY•Other major currencies
The euro stood at $1.1523 EUR=, down 0.04% so far in Asia, after climbing to a six-week high in previous session. Sterling GBP= traded flat at $1.34605 GBP=D3.
The Aussie AUD=D3 and Kiwi dollar NZD=D3 were roughly down 0.1%, last at $0.70245 and $0.5875, respectively.
BOJ decision and policy backdrop
The BOJ is widely expected to keep short-term interest rates steady at 1%, having just hiked in June, while delivering a hawkish signal as price pressures mount.
That follows U.S. Federal Reserve's decision to leave interest rates unchanged, which bruised the dollar as traders questioned whether the Fed's new chief was serious about containing inflation.
The slow pace of rate hikes has been blamed for pushing the yen to a 40-year low, and most analysts polled by Reuters expect the BOJ to raise rates again to 1.25% by year-end.
Market views and dollar performance
"If you want to kind of intervene... it's probably quite a good time," Rodrigo Catril, senior FX strategist at National Australia Bank, said, citing a weaker dollar amid pressure at the front end of the U.S. rates market and positive risk sentiment.
It also helps set the stage especially ahead of the BOJ where there is a risk that they may disappoint by not sounding hawkish enough, which could be a negative for the yen, he added.
The U.S. dollar index .DXY, which tracks the currency against six major peers, was little changed at 100.6 after plunging 0.7% in the previous session. It was heading for a 1.5% drop for the week and a 1.2% loss for the month.
