The dollar inched up against the yen on Tuesday after Japan’s central bank governor raised the possibility of further policy easing, while the euro’s latest bounce faded as the focus shifted back to economic challenges in the bloc.
The greenback rose to 110.615 yen from a low of 110.45 hit earlier in the session.
The central bank was ready to ramp up stimulus if sharp yen rises hurt the economy and derail the path towards achieving its 2 percent inflation target, said Bank of Japan Governor Haruhiko Kuroda, speaking at the Japanese parliament.
The dollar index versus a basket of six major currencies was nearly flat at 96.914 after ending the previous session unchanged. U.S. financial markets were closed on Monday for the Presidents’ Day holiday.
The euro dropped 0.15 percent at $1.1297. It edged up 0.16 percent overnight, pulling away from a three-month low of $1.1234.
The 10-year German bund yielded 0.110 percent on Monday after brushing 0.077 percent on Feb. 8, lowest since October 2016, following sharp cuts to the European Commission’s euro area economic growth forecasts.
The Australian dollar was down 0.2 percent at $0.7113 following the release of the Reserve Bank of Australia’s (RBA) policy meeting minutes on Tuesday.
