Investing.com - The dollar dipped against the yen on Tuesday, easing back from one-week highs but the yen remained on the defensive amid speculation that the Bank of Japan could soon ease monetary policy, while the euro inched higher.
USD/JPY eased 0.19% to 120.23, off overnight highs of 120.57.
The yen was lower in early trade as Asian stocks rose to two-week highs as a rebound in oil prices and fading expectations for a rate hike by the Federal Reserve this year boosted risk appetite.
Japan’s Nikkei was up 1% at the close, curbing investor demand for the traditional safe haven yen.
Japanese equities were also boosted by speculation that the BoJ could ease monetary policy further at its meeting this week after recent economic reports indicated that the economy may have fallen back into recession.
The dollar struggled to hold gains after Friday’s unexpectedly weak U.S. jobs report prompted investors to abandon expectations for a rate hike by the Fed before the end of 2015.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.13% to 96.1.
The dollar was slightly lower against the euro, with EUR/USD edging up 0.15% to 1.1201 from 1.1186 late Monday.
In the euro zone, data on Tuesday showed that German factory orders fell unexpectedly in August, adding to concerns that slowing global growth is starting to affect the euro area’s largest economy.
Industrial orders fell 1.8% from a month earlier, compared to expectations for a 0.5% increase.
The euro was flat against the yen, with EUR/JPY at 134.78.