The yen recovered Wednesday during morning trade after falling to a one-week low overnight. Investors are now doubtful that further easing from the Bank of Japan would put downward pressure on the currency.
The U.S. dollar was trading 0.23% higher against the yen, climbing to 102.81 after reaching a peak of 103.35. The euro also advanced against the yen, trading at 115.93 after reaching a one-week high of 116.07.
Reports surfaced overnight that the Bank of Japan is considering going deeper into negative territory with its interest rates. The currency regained some losses amid doubts that further stimulus would weaken the yen.
Meanwhile in New Zealand, the kiwi was weaker after a new report showed that the account deficit was wider than expected.
The current account for the second quarter showed a deficit of NZ$945 million compared to the previous quarter. A deficit of NZ$410 million was expected. On an annualized basis, the deficit came in at NZ$7.38 billion compared to the NZ$6.74 billion expected.
A decline in services surplus was largely to blame for the wider deficit.
The New Zealand dollar was trading down 0.06% against its U.S. counterpart, at 0.7248.
The Aussie moved higher against the dollar, up 0.11% to 0.7473. The currency saw gains despite the Westpac consumer sentiment index rising just 0.3%. Analysts were expecting an increase of 1%.
The greenback held steady against a basket of currencies, as investors remain focused on whether the Federal Reserve will raise interest rates at its next policy meeting. Expectations of an increase are much lower after comments from Fed Governor Lael Brainard called for “prudence” in the pace of future hikes.
The pound was virtually unchanged against the dollar, trading at 1.3188. The euro was flat at 1.1222.
A higher prospect of a rate increase typically boosts the dollar, as the currency becomes more attractive to yield-seeking investors.