Investing.com – The yen was broadly higher on Tuesday after the Bank of Japan trimmed the size of its bond purchases, while the euro retreated further from last week’s multi-month highs.
was down 0.43% at 112.63 by 08:58 AM ET (13:58 AM GMT) from a low of 112.50 earlier.
The yen strengthened after by 5% in its latest market operation, sparking speculation that it may slow its monetary stimulus later this year.
The Japanese currency rose to two-week highs against the euro, with down 0.81% to 134.28.
The euro fell to more than one-week lows against the dollar, with down 0.38% to 1.1921, after losing around 0.56% on Monday.
The fall in the euro came as investors took profits after its recent rally amid concerns that the European Central Bank may attempt to talk down the strengthening currency ahead of its monetary policy meeting later this month.
After getting off to a strong start to the year the single currency had hit a four-month high of 1.2088 on Thursday, putting it within striking distance of a September peak of 1.2092, its strongest level since early 2015.
The weaker euro helped support the dollar. The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.24% to 92.30.
Demand for the dollar was also underpinned by expectations for further interest rates hikes by the Federal Reserve this year after Friday’s U.S. jobs report did little to alter the outlook for monetary tightening.
While the rate of jobs growth cooled in December a pick-up in wage growth pointed to strength in the labor market.
Sterling moved lower against the dollar, with losing 0.36% to trade at 1.3520.
Meanwhile, the Canadian dollar edged lower against its U.S. counterpart, with inching up to 1.2429.
The loonie jumped to a three month high of 1.2354 on Friday after robust domestic jobs data bolstered expectations for the Bank of Canada to raise interest rates in its January meeting.
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