Dollar Edges Up vs Yen as Investors Eye ECB Meeting for Cues

The dollar has strengthened against the yen and other currencies ahead of Thursday's European Central Bank (ECB) policy meeting, which is expected to provide significant cues for investors. The ECB is widely anticipated to announce an extension to its quantitative easing program, but uncertainty remains over whether the size of monthly asset purchases will be scaled back or kept steady.

An announcement that the ECB will start scaling back its asset purchases would likely lead to a rebound in the euro, which has fallen 4% against the dollar over the past month. The European currency edged up 0.1% on Wednesday, but still struggled after plummeting to $1.0505 on Monday, its lowest level since March 2015.

DZ Bank currency analyst Sonja Marten said that investors had become too pessimistic about the euro's prospects in response to Italian Prime Minister Matteo Renzi's loss in a constitutional referendum. However, she noted that political issues often have limited impact on the euro's value.