The dollar rebounded from 7-week lows against the yen on Wednesday following hawkish comments from Federal Reserve officials.
The dollar was up 0.8 percent at 101.100 yen JPY=, with its advance accelerating after it rose past the 100.68 area, which traders had deemed a near-term level of resistance.
The U.S. currency had fallen to 99.550 yen overnight, its lowest since June 24, when post-Brexit referendum turmoil had boosted the safe-haven yen.
The greenback had been on the defensive since late last week as downbeat U.S. indicators dented prospects of a near-term Fed rate hike.
But it gained some reprieve on Wednesday on hawkish views expressed by Atlanta Fed President Dennis Lockhart, who said two hikes in 2016 was a possibility, and on New York Fed President William Dudley saying the central bank could possibly raise rates as soon as September.
"Hawkish views from Fed officials can prompt short covering in the dollar, but they are not sufficient enough to kick off an uptrend," said Junichi Ishikawa, forex analyst at IG Securities in Tokyo.
Japan MOF says ready to respond to excessive FX moves
Japan's top currency diplomat, Masatsugu Asakawa, warned investors on Wednesday against pushing up the yen too fast, saying Tokyo would respond to excessive market moves.
Asakawa made the comment to reporters when asked about the dollar's fall to a seven-week low below 100 yen JPY= on Tuesday.
A rising yen tends to worry Japanese policymakers because it reduces export competitiveness and weighs on corporate earnings, but Japan's options are limited, because other Group of Seven countries frown upon competitive currency devaluation.
"We would have to respond if there are excessive moves. We're closely monitoring (the market)," he said, adding that Japanese authorities were exchanging views on the currency market with Group of Seven partners.
The yen has risen around 20 percent versus the dollar this year due to fading expectations for interest rate hikes from the U.S. Federal Reserve.
Oil fell on Wednesday
Oil prices fell away from 5-week highs on Wednesday as analysts doubted possible producer talks to rein in ballooning oversupply would be successful.
Brent crude futures LCOc1 were trading at $48.86 per barrel at 0702 GMT (3.02 a.m. ET), down 37 cents from their last settlement. Despite the dip, prices are still up over 17 percent since early August and remain not far off a five-week high of $49.36 a barrel reached the previous day.
U.S. West Texas Intermediate (WTI) crude CLc1 was at $46.34 per barrel, down 24 cents from its last close, but still up 18 percent from early August.
Reference: Reuters
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