Yen steady, dollar weak ahead of central bank meetings

The yen remained steady, while the dollar struggled on Wednesday as traders awaited key decisions from the Bank of Japan (BOJ) and the Federal Reserve. Traders were cautious and hesitant to make new moves ahead of these important meetings. The euro hit a five-month high due to optimism over Germany's new fiscal plans. It last traded around $1.0937. Analysts believe this shift marks a significant change in Germany's economic approach. However, they also warn that the new government must implement reforms for long-term success. Meanwhile, the yen was little changed at 149.32 per dollar. Investors looked forward to the BOJ's two-day monetary policy meeting. Analysts expect the BOJ to keep rates steady, but they are eager to hear clues about future rate increases during Governor Kazuo Ueda's briefing. The pound was close to its four-month high at $1.30, while the Australian dollar edged up slightly. The U.S. dollar saw a small increase to 103.33 but remained near its five-month low. The dollar has dropped nearly 4% this month, impacted by President Trump's trade policies and rising recession fears. The Fed's upcoming decision is crucial for investors. It will provide insights into how the central bank views Trump's policies and their effects on the U.S. economy. Most expect the Fed to keep rates unchanged, highlighting a careful approach amidst uncertainty about economic growth and inflation.