Investing.com - The yen nudged weaker in Asia on Thursday as investors awaited the Bank of Japan's monetary policy meeting next week with speculation about possible policy steps swirling.
USD/JPY changed hands at 102.48, up 0.05%, while AUD/USD traded at 0.7478, up 0.09%.
The Bank of Japan's September 21 decision was bumped up a notch in market eyes on a report Wednesday suggesting a further move on negative interest rates could be announced on the same day the Federal Reserve decision on a rate hike takes place, possibly producing spillover effects.
At stake is whether BoJ Governor Haruhiko Kuroda will announce steps that stem from a review of monetary policy called for at the last meeting, which some analysts say stem from intense pressure by Prime Minister Shinzo Abe to get a clearer handle on effective policy options. Goldman Sachs (NYSE:GS) expects the BoJ "to maintain its current policy framework at next week's meeting and rather use the comprehensive assessment to increase the visibility of future policy direction."
Earlier, in New Zealand, second quarter GDP rose 0.9% quarter-on-quarter, weaker than the 1.1% gain seen and a a 3.6% pace year-on-year against a 3.7% rise expected. The RBNZ has forecast 0.8% growth in GDP for the quarter and 3.3% year on year, so the outcome on both is higher than its projection. The Reserve Bank's next official cash rate review is on September 22 and its outlook
is for further easing.
NZD/USD traded at 0.7276, down 0.06% after the data.
Ahead in Australia, MI inflation expectations are due for September with a previous reading of 3.5%. That is followed by jobs data from Australia with the employment change expected up by 15,000 jobs for an unemployment rate of 5.7% under a participation rate of 64.9%. At the same time, the RBA Bulletin will be released.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted at 95.33.
Overnight, the yen backed away from one-week lows against the dollar on Wednesday amid doubts that possible further easing by the Bank of Japan would cause a significant downside for the currency.
The dollar was steady against the other major currencies as uncertainty over the timing of the next Federal Reserve rate hike continued.
Fed Governor Lael Brainard said on Monday that the case to tighten monetary policy in the coming months is less compelling. The comments dampened expectations for a rate hike at the Fed’s next meeting which is scheduled for September 20-21. Investing.com's Fed Rate Monitor Tool showed a 15% chance of a rate hike next week.
Expectations of higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.