The yen nursed losses against most of its peers early on Wednesday and is likely to stay on the defensive in case the Bank of Japan surprises by injecting a fresh stimulus after its policy review later in the day. There is some speculation that Governor Haruhiko Kuroda could ease, rather than wait for a more crucial meeting on Oct. 30, when the central bank is expected to cut its long-term economic and price forecasts. The euro fetched 134.460 yen, having climbed 0.5% on Tuesday. The Canadian and New Zealand dollars touched highs of 92.33 yen and 78.81 yen respectively, scaling peaks not seen since late August.
The dollar weakened against the euro and the yen Tuesday ahead of a widely anticipated statement from the Bank of Japan expected early Wednesday local time. The euro traded at $1.1274, near this week's high of $1.12895. The dollar was also weaker against most of its emerging-markets rivals like the Mexican peso , Brazilian real and Turkish lira. In other currency trading, the Australian dollar rose to a two-week high of 71.44 cents after the Reserve Bank of Australia left interest rates unchanged at its policy meeting early Tuesday.
The New Zealand dollar rose to seven-week highs on Wednesday, boosted by a solid rise in dairy prices, while yen softness helped the Australian dollar stay near three-week peaks. The New Zealand dollar popped up to $0.6556, its highest since late August, after global dairy prices leapt 10% at an auction held by giant cooperative Fonterra. Dairy is New Zealand's top export earner and a sharp drop in milk prices has weighed on the local economy.