Investing.com - The yen gained slightly in Asia on Tuesday with the latest Federal Reserve review of interest rates in focus.
In Japan, the corporate good services price index rose 0.6% as expected, while in New Zealand the September trade deficit came in at NZ$3.2 billion year-on-year, slightly narrower than NZ$3.33 billion in August.
USD/JPY changed hands at 120.91, down 0.15%, after the data, while NZD/USD traded at 0.6782, down 0.07%.
Investors were looking ahead to Wednesday’s monetary policy announcement by the Fed for fresh indications on the timing of an initial rate hike.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.06% to 96.86.
Overnight, the dollar moved lower against the other major currencies on Monday, as far worse than expected U.S. housing sector data dampened demand for the greenback.
Data on Monday showed that U.S. new home sales dropped 11.5% last month to 468.000 units from a revised total of 529.000 units in August. Analysts had expected new home sales to slip 0.4% to 550.000 in September.
The dollar rallied late last week after European Central Bank President Mario Draghi signaled that further monetary easing is likely later this year.
The comments underlined the diverging monetary policy stance between the Federal Reserve and other central banks. The Fed is currently expected to start hiking interest rates sometime in early 2016.
On Friday, the People’s Bank of China unexpectedly cut interest rates in an effort to shore up slowing growth in the world’s second largest economy.
It was the sixth rate cut since last November, reinforcing the divergence in monetary policy between the U.S. and central banks in the rest of the world.