TOKYO: The dollar weakened in Asia Thursday as attention turns to a US Federal Reserve policy meeting while traders grow hopeful of a diplomatic solution to the Syria crisis.
The greenback fetched 99.50 yen in Tokyo midday trade, down from 99.92 yen in New York and well off the levels around 100.50 yen seen on Wednesday in Asia. The euro slipped to 132.55 yen from 133.03 yen while it also bought $1.3318 compared with $1.3314.
With no fresh catalysts, eyes are now on next week’s Fed meeting, where policymakers are expected to announce plans to start unwinding the bank’s huge stimulus programme.
A pull-back of the $85 billion a month bond-buying scheme — which keeps US interest rates subdued by keeping US bond yields low– would mean fewer dollars in the financial system, which in turn would send its value up.
However, last week’s worse-than-forecast August jobs report indicated the US economy still needs some support, leading analysts to speculate that the Fed will not be aggressive in its taper.