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FOREX-Dollar on track for weekly losses in wake of Fed, BOJ

Published 23/09/2016, 10:48 am
© Reuters.  FOREX-Dollar on track for weekly losses in wake of Fed, BOJ
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* Dollar pressured after Fed cuts its 2017, 2018 rates outlook

* Yen poised for weekly gains after BOJ alters policy framework

TOKYO, Sept 23 (Reuters) - The dollar gained in Asian trading on Friday but was on track to end a tumultuous week with losses after the Federal Reserve trimmed its long-term interest rate expectations and the Bank of Japan rebooted its monetary policy framework.

The U.S. Federal Reserve left interest rates unchanged on Wednesday but signalled it could still tighten monetary policy by the end of this year. The central bank projected a less aggressive rise in interest rates next year and in 2018, and it cut its longer-run interest rate forecast to 2.9 percent from 3.0 percent. dollar was up 0.3 percent at 101.04 yen JPY= , pulling away from a nearly four-week low of 100.10 touched overnight though still poised to shed 1.1 percent for the week.

The 100-yen level remains a key technical point, and a break of that could open the pair's downside, said Yutaka Miura, a senior technical analyst at Mizuho Securities.

But some analysts took heart at the fact that the dollar was able to pull itself off its overnight session lows ahead of the 100-yen level.

"Initial USD weakness was met with some better buying as the session grew and this seems to have taken some of the heat out of further risk sentiment," wrote Chris Weston, chief market strategist at IG in Melbourne.

Japan's top currency diplomat, Masatsugu Asakawa, vice finance minister for international affairs, said on Thursday that Japanese financial authorities are watching for speculative currency market moves and would respond if needed. spoke following a meeting, held on a public holiday, that involved the finance ministry, Financial Services Agency and the BOJ.

On Wednesday, ahead of the holiday, the BOJ shifted to targeting interest rates on Japanese government bonds as the focus of its massive monetary easing programme, dropping its explicit target of increasing base money. euro edged down 0.1 percent to $1.1201 EUR= , up 1.1 percent for the week. It gained 0.3 percent against the yen to 113.24 yen EURJPY= , down 0.7 percent for the week.

The dollar index, which tracks the greenback against a basket of six major rivals, was slightly higher at 95.456 .DXY , on track to log a weekly loss of 0.7 percent.

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