Headlines: WAITING FOR FUKUI
Main news:
- The dollar edged up against the yen on Wednesday
- Crude oil fell a third day as U.S warm weather forecast
Forex outlook:
The dollar edged up against the yen on Wednesday, recovering from a slide the previous day on soft producer prices and retail sales figures that pointed to a slowing U.S. economy.
The market was looking ahead to a bevy of U.S. reports that should further help to shape interest rate expectations, including minutes due on Wednesday from the Federal Reserve's last policy meeting, and consumer prices data on Thursday.
"We're still in a range, but the topside is limited rather than the downside," said Hidenori Kato, head of FX sales and trading at Societe Generale in Tokyo, referring to dollar/yen. "It's quite difficult to climb over 118."
The dollar rose to 117.80 yen from around 117.60 yen in late U.S. trade. It slid 0.5 percent the previous day on data showing U.S core producer prices fell 0.9 percent in October and retail sales slipped 0.2 percent in the same month. For the past month the dollar has shuffled roughly between 116.50 yen and 118.50 yen. Traders said Japanese importers were ready to buy below 117 and exporters keen to sell above 118.
Market players stayed bullish on the yen after data on Monday showed that Japan's economy grew double forecasts at a 2.0 percent annual rate in the July-to-September quarter, reinforcing a view that the Bank of Japan will raise rates in the next few months. But investors were cautious about chasing the yen higher as they wait to hear what BOJ Governor Toshihiko Fukui says about monetary policy at a news conference after the central bank ends a two-day meeting on Thursday, traders said.
The BOJ is widely expected to keep rates at 0.25 percent at the meeting, while many in the market expect the central bank to lift rates to 0.5 percent in the January-March quarter.
Gold: Gold was confined to a tight range on Wednesday ahead of the release of key U.S. data, with a sell-off in base metals affecting sentiment among some investors.
"There's not much buying interest from overseas. After a correction in base metals, people just don't have a clear picture about what's really going on. It's going to be a very tight range of $620 to $630," said a dealer in Hong Kong.
Crude oil: U.S. crude oil prices ended a choppy session lower on Tuesday amid front-month options expiration, as mild weather countered any lift expected as OPEC attempts to implement a production cut. "It's a tough environment to get any follow through in either direction," said Jim Ritterbusch, president, Ritterbusch and Associates. He noted that front-month refined products had been supportive during the day and finished slightly higher.
