Investing.com - The dollar fell against the yen on Wednesday, moving back from one-month highs set earlier in the week after a mixed batch of U.S. economic reports tempered expectations for a near-term interest rate hike.
USD/JPY fell to lows of 109.66 and was last at 109.86, off 0.74% for the day.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.17% to 95.67, pulling away from the two-month high of 95.96 set on Monday.
Data on Tuesday showed that while U.S. consumer spending rose at the fastest rate in almost seven years in April, consumer confidence deteriorated and a gauge of business activity in the Chicago region disappointed.
The mixed data prompted investors to slightly push back expectations on the timing of the next rate hike by the Federal Reserve.
Expectations for a near-term rate hike mounted after U.S. central bank chief Janet Yellen said late last week it could be appropriate raise rates in the coming months if the economy and the labor market continue to pick up as expected.
The Fed hiked interest rates in December for the first time in almost a decade.
Higher rates are positive for the dollar because they make the U.S. currency more attractive to yield-seeking investors.
Investors were turning their attention to Friday’s U.S. nonfarm payrolls report for May for fresh indications on the strength of the labor market.
In Japan, Prime Minister Shinzo Abe said Wednesday he was planning to delay a scheduled sales tax hike by two-and-a-half years, amid ongoing weakness in the economy.
The euro pushed higher against the dollar, with EUR/USD rising 0.17% to 1.1151, moving back from the 10-week trough of 1.1097 set on Monday.
But the single currency was lower against the firmer yen, with EUR/JPY down 0.37% at 122.80.
The Australian dollar rose to two-week highs after data showing that first quarter growth outstripped expectations was seen as reducing the likelihood of fresh rate cuts by the country’s central bank.
AUD/USD hit highs of 0.7299 before pulling back to trade at 0.7263.