The yen hovered near a two-week high on Tuesday, boosted by a report that the Bank of Japan (BOJ) could further tweak a key bond yield policy tool when it announces its monetary decision later in the day.
The dollar looked set to end the month largely unchanged against a basket of currencies , having lost some steam after a roughly 2.5% gain in September. Yet, the greenback is being underpinned by risks of another rate hike from the Federal Reserve, analysts say, noting a still-resilient U.S. economy.
The Japanese yen was last at 149.13 per dollar , after jumping to a two-week high of 148.81 in the previous session following a Nikkei report that the BOJ could potentially allow 10-year Japanese government bond yields to rise above 1% at a keenly-awaited policy decision later on Tuesday.
Against the euro, the yen last stood at 158.24 , having similarly risen to an over one-week high of 157.70 per euro on Monday. The Australian dollar last bought 94.50 yen .
In other currencies, the dollar edged broadly lower following a pick up in risk appetite, with Israel's ground offensive in Gaza seemingly less extensive than previously feared.
The dollar index last stood at 106.20.
The euro looked set to reverse two straight months of losses with a slight 0.4% gain for October, with the single currency last steady at $1.0611.
Data on Monday showed inflation in Germany eased noticeably in October, while a separate report the same day showed Europe's largest economy shrank slightly in the third quarter.
Spain's 12-month inflation in October was unchanged from the previous month at 3.5%, preliminary data also out on Monday showed.
The figures come ahead of euro zone inflation data due later on Tuesday.
Sterling fell 0.07% to $1.2159 and was poised to give up more than 0.3% for the month, ahead of an interest rate decision by the Bank of England later in the week where expectations are for the central bank to stand pat.
Elsewhere, the Australian dollar shed 0.09% to $0.6368 and was headed for a monthly loss of more than 1%.
Source : Reuters
