Investing.com - The dollar rebounded from three-and-a-half month lows against the yen on Wednesday as investors looked ahead to the minutes from the Federal Reserve’s latest policy meeting.
USD/JPY was up 0.15% to 101.49 after falling to lows of 100.83 earlier, the weakest level since February 5.
Investors were waiting the minutes from the Fed’s April meeting for insight on the central bank's view of the economy.
The Fed has been tapering its asset purchase program this year, amid signs that the recovery in the labor market is continuing, but has also reiterated that rates are likely to remain at record lows for a considerable time after the stimulus program ends.
On Tuesday, New York Fed President William Dudley reiterated the central bank’s dovish stance, saying the pace of rate hikes was likely to be “slow”.
The yen rose to more than three month highs against the dollar and the euro earlier after the Bank of Japan indicated that additional easing is not imminent at the conclusion of its two-day policy meeting.
The BoJ said its stimulus program has been working as intended and that the economy is showing signs of weathering the impact of a sales tax increase that came into effect on April 1.
The euro fell to session lows against the dollar, with EUR/USD down 0.25% to 1.3666, not far from the two-and-a-half month lows of 1.3647 reached late last week.
The euro remained under pressure from mounting expectations for monetary easing by the European Central Bank at its next meeting in June.
The pound trimmed gains against the dollar, with GBP/USD up 0.27% to 1.6884.
The pair rose to highs of 1.6921 earlier Wednesday after official data showed that retail sales in the U.K. jumped 1.3% in April, more than double forecasts for a 0.5% increase, driven by higher food sales over the Easter holiday.
The pound received an additional boost after the minutes of the Bank of England’s May meeting noted that some Monetary Policy Committee members believe the decision on when to raise rates is "becoming more balanced," indicating that they are becoming more hawkish about the argument for hiking interest rates.
The dollar extended gains against the Swiss franc, with USD/CHF climbing 0.30% to 0.8945.
The Australian dollar fell to two-week lows, with AUD/USD down 0.27% to 0.9216, while the New Zealand and Canadian dollars were also weaker, with NZD/USD losing 0.22% to trade at 0.8553 and USD/CAD rising 0.25% to 1.0931.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, rose to a one-week high of 80.23.