USDJPY Edged Up Slightly Awaiting Yellen

by on July 14, 2014 8:57 am BST

Against the yen, the greenback rose about 0.2 percent to 101.43, moving further off a seven-week trough of 101.06 yen plumbed last Thursday. The euro was flat on the day at 137.97 yen, recovering from last week’s fall to a five-month low of 137.50 yen.

USDJPY is trending up slightly this morning though major currency pairs largely stuck close to recent ranges, as investors awaited events this week including Federal Reserve Chair Janet Yellen’s congressional testimony for cues on the outlook for U.S. monetary policy.

Demand for the safe-haven yen faded on Friday as concerns eased about the health of Portugal’s largest bank and its impact on the euro zone financial system.

Traders said dollar bulls are unlikely to get too excited ahead of Yellen’s testimony on Tuesday and Wednesday.

They also expect Yellen to defend the principle that financial stability should remain primarily in the remit of regulators, while central banks should focus on macroeconomic stability.

AUDUSD, meanwhile, kept its head down after the country’s central bank chief again said the currency was too strong. AUDUSD last traded at $0.9395, slightly higher on the day having dipped as low as $0.9370. Similar remarks from Stevens early this month saw the Aussie slide as far as $0.9327.

EURUSD, meanwhile, was steady at $1.3604, having wobbled on either side of $1.3600 in the past week.

Investors also awaited a policy review by the Bank of Japan on Tuesday, though the central bank was widely expected to maintain its policy and its broader economic outlook.

The BOJ next week may trim its economic growth forecast for the current year, sources familiar with its thinking said, reflecting soft exports and a bigger-than-expected slump in household spending after a sales tax hike in April, though the change would not tip any policy changes to come.