Investing.com - The dollar moved higher against the yen on Wednesday as investors anxiously awaited the outcome of the final Federal Reserve policy meeting of 2013 later in the trading day.
During European morning trade, USD/JPY hit session highs of 103.03 and was last up 0.25% to 102.91, holding below the five year peaks of 103.91 struck on Friday.
Investors remained wary ahead of the Fed announcement, with some expecting the bank to make a small reduction in the pace of its USD85 billion-a-month asset purchase program.
However, many believe that the bank will wait until early next year to start rolling back stimulus, despite recent indications the U.S. economic recovery is deepening.
Sentiment on the yen was hit after data on Wednesday showed that the trade deficit widened to JPY1.29 trillion in November, increasing 35% from the same month last year as imports rose 21.1% and exports increased by 18.4%.
The euro was little changed against the dollar, with EUR/USD dipping 0.02% to 1.3763.
The euro showed little reaction after the Ifo German business climate index rose to a 20-month high of 109.5 in December, in line with forecasts and up from 109.3 in November.
The pound was higher against the dollar, with GBP/USD rising 0.20% to 1.6296 ahead of U.K. employment data and Bank of England minutes scheduled for release later in the session.
The dollar pulled away from two year lows against the Swiss franc, with USD/CHF rising 0.23% to 0.8869, close to the lows of 0.8839 struck last Wednesday.
The greenback eased against the Australian dollar, but remained close to three-and-a-half month highs, with AUD/USD edging up 0.15% to 0.8912.
Australia's dollar remained under pressure after RBA Governor Stevens reiterated the bank's recent message that an exchange rate above USD0.90 is not suitable for the economy.
The U.S. dollar was mixed against its New Zealand and Canadian counterparts, with NZD/USD slipping 0.14% to 0.8259 and USD/CAD dipping 0.01% to 1.0606.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged down 0.04% to 80.17.
During European morning trade, USD/JPY hit session highs of 103.03 and was last up 0.25% to 102.91, holding below the five year peaks of 103.91 struck on Friday.
Investors remained wary ahead of the Fed announcement, with some expecting the bank to make a small reduction in the pace of its USD85 billion-a-month asset purchase program.
However, many believe that the bank will wait until early next year to start rolling back stimulus, despite recent indications the U.S. economic recovery is deepening.
Sentiment on the yen was hit after data on Wednesday showed that the trade deficit widened to JPY1.29 trillion in November, increasing 35% from the same month last year as imports rose 21.1% and exports increased by 18.4%.
The euro was little changed against the dollar, with EUR/USD dipping 0.02% to 1.3763.
The euro showed little reaction after the Ifo German business climate index rose to a 20-month high of 109.5 in December, in line with forecasts and up from 109.3 in November.
The pound was higher against the dollar, with GBP/USD rising 0.20% to 1.6296 ahead of U.K. employment data and Bank of England minutes scheduled for release later in the session.
The dollar pulled away from two year lows against the Swiss franc, with USD/CHF rising 0.23% to 0.8869, close to the lows of 0.8839 struck last Wednesday.
The greenback eased against the Australian dollar, but remained close to three-and-a-half month highs, with AUD/USD edging up 0.15% to 0.8912.
Australia's dollar remained under pressure after RBA Governor Stevens reiterated the bank's recent message that an exchange rate above USD0.90 is not suitable for the economy.
The U.S. dollar was mixed against its New Zealand and Canadian counterparts, with NZD/USD slipping 0.14% to 0.8259 and USD/CAD dipping 0.01% to 1.0606.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged down 0.04% to 80.17.