Tokyo: The dollar weakened on Tuesday while the yen hovered near the 160-per-dollar level, as markets weighed growing expectations of interest-rate hikes by both the US Federal Reserve and the Bank of Japan.
According to Qatar News Agency, the dollar index, which measures the US currency against six major currencies, fell to 99.37, extending losses after the previous session's gains. Investors are pricing in a greater chance of a Federal Reserve rate hike this month following hawkish comments from Fed Chair Kevin Warsh, while attention remains focused on upcoming US economic data.
The yen edged up to 159.81 per dollar after weakening beyond the key 160 level in the previous two sessions. The currency gained support after US Treasury Secretary Scott Bessent stepped up pressure on Japan and the Bank of Japan to raise interest rates, saying he expected measures that would lead to a stronger yen.
The euro was little changed at $1.1623, while sterling stood at $1.35575. The Australian dollar rose to $0.7172, and the New Zealand dollar was at $0.5921.
The yen remains the focus of currency markets as investors assess whether a BOJ rate hike and possible further policy action will be enough to halt its slide toward the 160-per-dollar threshold.
