By Hiroyuki Kachi 
 

The yen gained traction against its peers during Asian morning trade Thursday, rising above the Y100-line versus the dollar again, on the Federal Reserve's cautious stance in raising rates and weakness in Tokyo stocks prompting buying of the Japanese currency.

The greenback fell to as low as Y99.64 earlier in the session, coming close to Y99.55 set on Tuesday--the lowest level since the U.K.'s decision to leave the European Union in late June. Around 0250 GMT, the U.S. currency rose back above the Y100-threshold, changing hands at Y100.10, but still below Y100.28 late Wednesday in New York.

The euro also dropped to as low as Y112.65 before coming back to Y113.13 midday. The common currency was at Y113.20 late Wednesday. The pound fell to as low as Y130.02 from Y130.76.

The Fed's minutes from its July 26-27 policy meeting released overnight showed members of the Federal Open Market Committee were split on the timing of an interest rate hike. The minutes suggested a rate increase is a possibility as early as September, but that the Fed won't commit to moving until a stronger consensus can be reached about the outlook for growth, hiring and inflation.

That dampened sentiment for some investors who were anticipating more hawkish signals especially after Fed officials remarks earlier this week flagging the possibility of a rate increase in September.

Weakness in Tokyo stocks also bruised the market sentiment, prompting buying of the perceived safety of the Japanese currency. The Nikkei Stock Average fell 1.1% in early morning session, before trimming losses to a 0.2% fall midday.

"I don't think investors are buying the yen aggressively," said Marito Ueda, director at FX Prime byGMO. "To put it the other way around, there is no reason to buy the dollar and others in a positive manner," given the Fed's cautious stance toward raising short-term rates and continued thin market volume due to the summer holiday, said Mr. Ueda.

"The possibility is now even lower of Fed chair (Janet) Yellen giving hawkish signals to smooth the way for a September rate increase" at the Fed's Jackson Hole symposium on Aug. 26, said Nomura Securities chief FX strategist Yunosuke Ikeda in a morning note. He added that he expects any full-fledged dollar buying will now be pushed back to November-December.

In other currency trade, the euro briefly hit $1.1328, its highest since June 24 shortly after the Brexit vote, amid a broader dollar selling. That compared with $1.1291 late Wednesday.

The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was down 0.16% at 85.47.

 
 
Interbank Foreign Exchange Rates At 22:50 EST / 0250 GMT 
 
                           Latest       Previous   %Chg    Daily    Daily   %Chg 
Dollar Rates                               Close            High      Low  12/31 
 
USD/JPY Japan           100.11-12      100.27-28  -0.16   100.29    99.64 -16.77 
EUR/USD Euro            1.1300-03      1.1288-91  +0.11   1.1327   1.1287  +4.06 
GBP/USD U.K.            1.3052-54      1.3041-43  +0.08   1.3089   1.3037 -11.42 
USD/CHF Switzerland     0.9612-16      0.9620-24  -0.08   0.9630   0.9593  -4.05 
USD/CAD Canada          1.2833-38      1.2842-47  -0.07   1.2863   1.2815  -7.25 
AUD/USD Australia       0.7694-98      0.7652-56  +0.55   0.7719   0.7650  +5.61 
NZD/USD New Zealand     0.7277-83      0.7249-55  +0.39   0.7311   0.7250  +6.54 
 
Euro Rate 
 
EUR/JPY Japan           113.12-16      113.18-22  -0.05   113.24   112.67 -13.49 
 
Source: Tullett Prebon 
 

Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com

 

(END) Dow Jones Newswires

August 17, 2016 23:31 ET (03:31 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.