Investing.com - The dollar fell to fresh three-and-a-half month lows against the stronger yen on Wednesday after the Bank of Japan indicated that additional easing is not required at present, while the pound strengthened after an upbeat U.K. retail sales report and more hawkish sounding Bank of England minutes.
USD/JPY was down 0.25% to 101.07, after falling to lows of 100.83 earlier, the weakest level since February 5.
The yen strengthened broadly after the BoJ said its stimulus program has been working as intended, and refrained from implementing additional easing measures at the conclusion of its two-day policy meeting on Wednesday.
The central bank said the economy is showing signs of weathering the impact of a sales tax increase that came into effect on April 1 and pledged to continue to expand the monetary base at a pace of ¥60 trillion to ¥70 trillion per year.
Investors were turning their attention to of the minutes from the Fed’s latest monetary policy meeting due out later Wednesday, for insight on the central bank''s view of the economy.
Recent U.S. economic reports indicating that the recovery remains uneven have weighed on U.S. Treasury yields, pressuring the dollar lower.
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 euro was also trading at more than three month lows against the yen, with EUR/JPY down 0.42% to 138.23, the weakest since February 7.
The shared currency was lower against the dollar, with EUR/USD sliding 0.16% to 1.3678, 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 and data last week showing that the euro zone economy grew at a slower than forecast rate in the first quarter.
The pound rose to almost two-week highs against the dollar, with GBP/USD up 0.33% to 1.6893.
Sterling gained ground 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 BoE’s May meeting noted that some Monetary Policy Committee members believe the decision on when to raise rates is "becoming more balanced," indicating that some policymakers are becoming more hawkish about the argument for hiking borrowing costs.
The euro fell to its lowest level against the pound in 16 months, with EUR/GBP down 0.48% to 0.8095.
The dollar pushed higher against the Swiss franc, with USD/CHF easing up 0.15% to 0.8932.
The Australian dollar was at two-week lows, with AUD/USD slipping 0.13% to 0.9229, while the New Zealand and Canadian dollars were almost unchanged, with NZD/USD at 0.8565 and USD/CAD at 1.0903.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was steady at 80.11.
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