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Yen firms to as much as 151.92 per dollar
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Euro unchanged after the bloc's strong Oct inflation data
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Sterling rises on higher for longer rate view
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Dollar edges lower ahead of PCE data
(Updates at 1025 GMT)
By Brigid Riley and Medha Singh
TOKYO/LONDON, Oct 31 (Reuters) - The yen firmed on
Thursday after the Bank of Japan took a less dovish tone than
expected while the U.S. dollar ticked lower ahead of jobs data
later this week and the U.S. presidential election next week.
The dollar was last down 0.6% on the Japanese currency at
152.360 yen as the BOJ maintained ultra-low interest
rates but said risks around the U.S. economy were somewhat
subsiding, signalling that conditions are falling into place to
raise interest rates again.
Governor Kazuo Ueda's remarks were seen as less dovish than
those made before the meeting that the BOJ could "afford to
spend time" scrutinising the fallout from risks such as U.S.
economic uncertainties.
The BOJ cut its core consumer inflation forecast but said
risks were skewed to the upside for that year, causing the yen
to rise, said Andrea Cicione, head of strategy at
GlobalData.TSLombard.
"This was a deliberate comment by the BOJ to stop this
weakening in the yen that has been going on for six weeks."
The Japanese currency has taken a beating, down around 6%
for the month as the dollar and U.S. Treasury yields have
hovered around their highest since July.
Japan's political shake-up has only added to the yen's woes,
heightening uncertainty about the country's fiscal and monetary
policy outlook.
The yen also firmed on other currencies on Thursday with the
euro down 0.5% at 165.7 yen.
Elsewhere, sterling firmed 0.3% to $1.2995, a day
after Britain's finance minister Rachel Reeves' launched the
biggest tax increases since 1993 in her first budget. The
big-spending plans prompted traders to bet on fewer interest
rate cuts by the Bank of England.
The euro edged 0.2% higher to $1.087325 after data
showed the bloc's inflation accelerated more than expected in
October.
The report follows better than expected third-quarter euro
zone GDP data on Wednesday that bolstered bets against a larger
interest rate cut by the European Central Bank in December.
The dollar index, which measures the currency against
six major rivals, dipped 0.1% to 103.94, after its recent surge
put it on pace for its biggest monthly gains against peers since
April 2022.
JOBS, ELECTION IN FOCUS
All eyes were on data on the U.S. Personal Consumption
Expenditures (PCE) Price Index for September on Thursday and the
closely-watched nonfarm payrolls report on Friday.
Economists polled by Reuters estimate 113,000 jobs were
added in October, although the number could be lower due to
recent hurricanes.
But the jobs report may find itself overshadowed in the
run-up to the U.S. presidential election on Tuesday.
"A slightly hotter or slightly cooler (jobs) number to me
probably doesn't change the dial too much given the upbeat trend
in recent economic data," said IG Market Analyst Tony Sycamore.
"It makes sense to me to be ... taking some risk off and
moving to the sidelines" ahead of a week that will "set the tone
for the end of the year," he said.
Some investors have been putting on trades betting
Republican candidate Donald Trump will win, helping to lift the
dollar and U.S. Treasury yields, although he is still neck and
neck with Vice President Kamala Harris in several polls.
Trump's plan to implement tax cuts, looser financial
regulations, and higher tariffs are seen as inflationary and
could slow the Federal Reserve in its policy easing path.
In cryptocurrencies, leading token bitcoin last
fetched about $72,260, after pushing as high as $73,609.88 on
Tuesday.