The dollar was almost unchanged against the yen on Wednesday in thinned, rangebound trade.
At around 0450 GMT, the greenback was at Y120.47, compared with Y120.44 late in New York.
The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was down 0.03% at 89.90.
Currency trading remained thin with many investors closing their positions ahead of the end of the year. Financial markets in Tokyo will be closed from Thursday to Friday and will reopen Monday.
Amid a lack of fresh trading cues, the dollar remained directionless in an extremely narrow range around Y120.50 throughout the Asia session. But the steady gain in Tokyo stocks provided the dollar with downside support. The Nikkei Stock Average rose 0.5% midday, heading to close 2015 trade higher for the fourth straight year.
Given its resilience to stay above the Y120 mark, “the dollar’s strength has started to show itself,” said Marito Ueda, director of FX Prime byGMO.
There remains a chance that the dollar would fall below the Y120 threshold due to tumbling oil prices or emerging- market turbulence. “If the dollar falls below the Y120-line, the pace of decline would be fast,” he said.
But “looking at the ongoing move, the dollar is more likely to ratchet up,” given a recent gain in U.S. long-term yields that may foretell the Federal Reserve’s action to raise rates again some time in the first quarter of 2016. The yield on the benchmark 10-year U.S.Treasury note was 2.293% Tuesday, compared with 2.227% Monday.
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