The yen extended gains after Bank of Japan's board member Hajime Takata said the central bank's price target is finally coming into sight, bolstering expectations for the central bank to exit its ultra-loose policy stance.
USD/JPY fell 0.5% to 149.87. The yen was also supported as Japan's Vice Finance Minister for International Affairs Masato Kanda said that excessive currency moves aren't desirable.
Most other Group-of-10 currencies traded in a narrow range before the release of US personal consumption expenditures data, which is expected to provide clues on the timing of potential Federal Reserve rate cuts.
Takata's comments probably triggered some month-end adjustments in dollar-yen positions amid a lack of major market drivers, says Tsutomu Soma, a bond and currency trader at Monex Inc. "It's unlikely the yen will accelerate gains from here".
The Bloomberg Dollar Spot Index eased 0.1% while the yield on 10-year Treasuries rose one basis point to 4.28%.
The PCE deflator index, the Fed's preferred gauge of inflation, is expected to slow to 2.4% y/y in January from 2.6% in December, according to median estimate in Bloomberg survey.
AUD/USD climbed 0.2% to 0.6510.
NZD/USD inched up 0.1% to 0.6104 after posting its biggest drop since October in the previous session.
New Zealand central bank governor Adrian Orr said policymakers decided against raising interest rates this week because latest data confirmed that inflation is slowing.
Source : Bloomberg
