Market News

Summary

• Sentiment boosted by US-Japan deal this week
• Markets pauses ahead of Fed, BOJ policy meetings next week
• Eyes on US-EU trade deal negotiations
• Markets shrug off Trump's Fed visit

SINGAPORE, July 25 (Reuters) - The dollar inched off two-week lows on Friday, but kept on track for its biggest weekly drop in a month, as investors contended with U.S. tariff negotiations before an August 1 deadline, while looking ahead to central bank meetings next week.
Both the U.S. Federal Reserve and the Bank of Japan are expected to hold rates at next week's policy meetings, but traders are focusing on the subsequent comments to gauge the timing of the next move.

"Next week’s BOJ policy meeting will be closely watched for hints on the timing of the next rate hike," said Carol Kong, currency strategist at Commonwealth Bank of Australia.

The prospect of rate hikes by the BOJ had improved, she added, after a trade deal struck with the United States this week lowered tariffs to 15% on auto imports from Japan.

But a near-term rate hike is hardly a done deal with the timing dependent on whether the economy can withstand the impact of U.S. tariffs, four sources familiar with the BOJ's thinking told Reuters.

The yen stood at 147.20 to the dollar, on course for a weekly gain of nearly 1%, although the currency was weaker on the day as investors weighed monetary policy outlook and the fate of embattled Japanese Prime Minister Shigeru Ishiba.