Investing.com - The yen rose against the dollar and the euro on Tuesday, but gains were held in check as investors looked ahead to U.S. and Japanese central bank meetings this week.
USD/JPY fell 0.28% to 110.88, moving further back from the three-week highs of 1118.86 set on Monday.
EUR/JPY was down 0.22% at 125.03, off Monday’s three-week highs of 125.52.
The Bank of Japan is to wrap up its two-day policy meeting on Thursday and in recent days expectations for more easing have mounted.
The yen fell 2.1% against the dollar on Friday after Bloomberg reported that the BoJ could expand the negative interest rate policy it put in place in January at the conclusion of its rate review.
Some investors believe the bank will not roll out further easing measures as it continues to assess the impact of negative rates.
But most analysts expect the BoJ to cut its forecasts for growth and inflation as the strong yen and a severe earthquake this month which has disrupted supply chains cloud the economic outlook.
Investors were also looking ahead to the conclusion of the Federal Reserve’s policy meeting on Wednesday.
The Fed, which hiked rates for the first time in almost a decade in December, is expected to hold steady for now, but investors will be looking at the bank’s rate statement for indications on the likelihood of a June interest rate increase.
The dollar was slightly lower against the euro, with EUR/USD edging up 0.10% to 1.1277.
The pound was at 10-week highs as concerns over a British exit from the European Union, or Brexit, abated.
GBP/USD touched highs of 1.4546, the most since February 12 and was last at 1.4536.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.16% at 94.59.