US dollar pulled back from session highs against the Japanese yen on Monday, but the greenback was still supported by expectations that the Federal Reserve will begin unwinding its easing program by this years end.
USD/JPY came off nearly two-week highs during European late morning trade, at levels around 97.91-97.96, as previously the cross reached 98.70, currently the session high.
The safe haven demand for the yen was strengthened, as concerns appeared over financial stability in China. People’s Bank of China said that lenders must meet higher requirements in liquidity management.
On the other hand, US dollar gained strength after last Wednesday FED Chairman Ben Bernanke announced that the central bank could begin slowing bond purchases by the end of 2013 and wind them down completely by the middle of 2014, a statement that continued weighing on market sentiment during the recent trading days.
The greenback was higher against the British pound, with GBP/USD retreated 0.44% to 1.5354. Dollar was almost without change against the Swiss franc, with USD/CHF ticking up by 0.01% to 0.9344.
The dollar index, that tracks the performance of the greenback against a basket of six major currencies, gained 0.18% to 82.76.
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