Following the release of U.S. consumer confidence data and the conclusion of major central bank meetings this week, the Bloomberg Dollar Spot Index edged higher amid thin trading. The yen weakened after Bank of Japan Governor Kazuo Ueda signaled caution on further rate hikes following Friday's increase.
The Bloomberg Dollar Spot Index rose 0.1%, poised for a 0.2% weekly gain.
U.S. consumer confidence rebounded in December, though less than expected, as concerns over high housing prices weighed on sentiment.
New York Fed President John Williams stated there was no urgent need for further rate adjustments, with recent jobs and inflation data doing little to alter his outlook.
The 10-year U.S. Treasury yield climbed 3 basis points to 4.15%, while U.S. equity markets advanced.
USD/JPY surged 1.4% to a session high of 157.67 post-BoJ meeting, with the yen hitting a one-month low and marking its largest intraday drop since early October.
The Bank of Japan raised its benchmark rate to the highest level in three decades.
Governor Ueda emphasized at the post-decision press conference, "We'll continue making appropriate decisions at each policy meeting. The pace of rate adjustments will depend on economic conditions and price levels."
The yen's decline briefly moderated during New York trading after Finance Minister Shunichi Suzuki expressed deep concern about recent currency moves, questioning whether exchange rates reflected fundamentals.
EUR/USD remained little changed at 1.1721, while GBP/USD held steady at 1.3384.
High-beta currencies led gains among G-10 currencies against the dollar.
USD/NOK fell 0.3% to 10.1273, and AUD/USD rose 0.1% to 0.6617.
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