Yen steady as BOJ kicks off big week for central banks

SINGAPORE: The Japanese yen steadied in the Asian morning on Tuesday ahead of ​the Bank of Japan’s latest policy decision, the first in a busy week for major central banks including ‌the Federal Reserve as the Iran war loomed large over policymakers and markets.

The yen was flat against the dollar at 159.49 yen, with the BOJ widely expected to keep interest rates on hold at 0.75% later in the day.

Central banks in the US, the euro zone, the UK and Canada ​are among the others that will deliver rate decisions later this week.

“With every central bank that’s meeting, they’ve all ​made it very clear that in the fog of uncertainty about how the war will play ⁠out as far as both inflation and growth, it’s giving them every excuse they need to sit on their hands,” said ​Ray Attrill, head of FX strategy at National Australia Bank in Sydney.

“Earlier in the month we had expected that the BOJ would ​be lifting rates today, but the probability of that in markets is less than 5%,” he added. “We’re interested to see their updated forecasts for growth and inflation that will include 2028 for the first time.”

The persistent yen weakness remains a source of concern for Tokyo. Earlier on Tuesday, Japanese ​Finance Minister Satsuki Katayama warned speculators again, saying that volatility in the crude oil futures market is affecting currency markets, adding ​that authorities are “standing by around the clock” to take “decisive action”.

Thai baht/US dollar steady on Monday

The Federal Open Market Committee meets on Wednesday and is expected to keep rates on hold, ‌in what ⁠is likely to be chair Jerome Powell’s last meeting after Republican Senator Thom Tillis dropped his block on Kevin Warsh’s confirmation process on Sunday.

“It’s not a meeting where rates policy is on the front burner, but the FOMC assessment of the economy may improve,” said Steve Englander, global head of G10 FX research at Standard Chartered in New York. “The inflation picture is improving very slowly at ​best and could be an ​emerging issue for Warsh to ⁠deal with” when he takes office.

Dollar advances as US-Iran talks suffer setback

The Senate Banking Committee is also expected to advance Warsh’s nomination as Federal Reserve Chair to the full Senate, with a vote now set for 10 a.m. EDT (1400 ​GMT) on Wednesday.

The U.S. dollar index , which measures the greenback’s strength against a basket of six ​currencies, snapped a ⁠two-day losing streak with a 0.1% rise on Tuesday to 98.448.

Most other currencies were unchanged as markets looked for any signs of progress to end the Iran war.

US President Donald Trump discussed a new Iranian proposal on resolving the war with his top national security aides ⁠on Monday. ​

But a US official said later that Trump is unhappy with the proposal ​because it did not address Iran’s nuclear program.

The euro was down 0.1% at $1.1715, while the British pound was trading at $1.3527. The Australian dollar was flat at $0.7187 and ​its New Zealand counterpart was fetching $0.5908.

Bitcoin was up 0.5% at $77,365.65, while ether rose 0.6% to $2,306.63.