NEW YORK: The dollar fell against most major currencies on Tuesday in choppy trading, weighed down by expectations of a possible policy shift at the Bank of Japan that could end its so-called “yield curve control”, which could be a precursor to adopting a tighter monetary policy.
The expectations have pushed the yen higher against the dollar over the last few weeks. Since Jan. 6, the yen has surged nearly 5% against the greenback.
Sterling, meanwhile, led gains versus the dollar, hitting a five-week high after data showed the pace of pay growth in Britain, closely watched by the Bank of England as it gauges how much higher to raise interest rates, accelerated again.
In late morning trading, the dollar was flat to slightly lower against the yen at 128.535 yen.
Against the Swiss franc, the dollar dropped 0.5% to $0.9218 francs.
The Australian and New Zealand dollars rose against the greenback, up 0.3% at US$0.6977 and up 0.6% at US$0.6418 respectively.
The pound rose 0.7% against the dollar to $1.2275, after surging to a five-week peak of $1.2299 after data showed UK wages growth picked up more pace in the three months to November, while employment rose by a faster-than-expected 27,000.