Japanese yen banknotes of various denominations are arranged for a photograph in Tokyo, Japan, on July 22, 2015.
Kiyoshi Ota | Bloomberg | Getty Images
The Japanese yen inched higher on Wednesday as traders bet an ultra-accommodative U.S. Federal Reserve would weigh on the U.S. dollar, while the Chinese yuan extended gains one day after data pointed to better prospects for the world’s No. 2 economy.
The Fed is due to make its first policy statement since adopting a more tolerant approach to inflation later on Wednesday.
Traders bought yen on the belief the U.S. central bank may promise further stimulus, which would likely weaken the U.S. dollar and push Treasury yields lower. The Fed is not expected to move on rates but adjustments to bond purchases are possible.
The yen touched a two-week high of 105.25 per dollar, but investors reduced dollar shorts, or bets that the dollar would