Investing.com - The dollar rebounded against the yen on Thursday after China's foreign exchange regulator said a report about Beijing slowing or halting U.S. treasury purchases could be wrong.
USD/JPY was up 0.36% to 111.84 by 02:52 AM ET (07:52 AM GMT) pulling away from Wednesday’s one-and-a-half month low of 111.26.
China’s foreign exchange regulator said on Thursday that a report about Beijing slowing or halting its U.S. bond buying may be based on erroneous information and could be "fake".
The dollar slumped on Wednesday, falling more than 1% against the yen after Bloomberg reported that Chinese officials reviewing foreign-exchange holdings had recommended slowing or halting purchases of U.S. bonds. China is the largest foreign holder of U.S. government debt.
The dollar was already on the defensive after the Bank of Japan trimmed the size of its bond purchases on Tuesday, sparking speculation that it could start to scale back its monetary stimulus later this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.18% to 92.28.
The dollar gained ground against the euro, with EUR/USD sliding 0.14% to 1.1930.
Meanwhile, the Australian dollar strengthened after data on Thursday showed that retail sales recorded the largest monthly increase in four years in November.
The Canadian dollar slipped lower against its U.S. counterpart, with USD/CAD edging up 0.12% to 1.2563, not far from Wednesday’s highs of 1.2582.
The loonie remained on the defensive as expectations for a rate hike by the Bank of Canada next week diminished amid concerns that the U.S. is about to withdraw from the North American Free Trade Agreement.
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