Dollar-Yen Range Bound Ahead of US and Japan Policy Meetings

The dollar-yen exchange rate held steady in the upper 163 yen range on February 28, as market participants awaited key policy decisions from the US Federal Reserve and Japan's Bank of Japan.

Currency analyst Tsutomu Nakamura noted that the retreat of safe-haven buying, following reports of a ceasefire between the US and Iran, had led to an unwinding of dollar demand.

Nakamura added that expectations for an early rate hike by the Federal Reserve had helped support the dollar, causing it to rebound to 163.70 yen level.

Despite concerns over Japan's deteriorating fiscal situation and speculation about slower Bank of Japan rate hikes, a currency broker suggested that a wait-and-see mood would prevail ahead of the policy meetings.