US dollar and Goverment deal.

Dollar mired near 3 year old low:

TOKYO- the yen ticked up slightly on Tuesday after the bank of japan kept monetary policy unchanged as expected but made tweaks to its views on inflation that some trader say pointed to a slightly less pessimistic central bank view on consumer prices.

The dollar had recovered from earlier losses after U.S. senators struck a deal to lift a three-day government shutdown but it remained concerns about its yield advantage fell of 110.19 after the BOI maintained its policy and its economic and price projections.

The central bank on Tuesday said risks to price are still tilted to the downside, though it did change its assessment on prices to "stable" from "weak", technical tweak to reflect a recent pickup in inflation, which is largely due to rise in oil prices.

"I don't see anything in today's announcement that suggests a change in the preoccupied with the idea that the BOJ will adjust its monetary policy at some stage in the future," said Minori Uchida chief FX analyst at the bank of Tokyo-Mistubishi UFJ.

The yen has gained after the Bank of japan trimmed its buying of long-dated goverment bonds earlier this month, sparking speculation of an eventual exit from its large stimulus.

"Today's market reaction suggested the market may not ditch this perception easily no matter how clearly BOJ Governor (Haruhiko) Kuroda denies that he is considering policy adjustment," Uchida added

Dollar near 3-year low after US government funding deal:

The dollar pared some of its losses after US senators struck a deal to lift a three-day government shutdown but it was mired near a three-year low against a basket of currencies on lingering concerns about its yield advantage being chipped away.

The US House of Representatives passed a short-term measure on Monday to fund the federal government through February 8 after it won enough support in the Senate. Still, a boost from the deal did not last long partly because the measure secured funding for only a little more than two weeks, with the republicans and Democrats still at loggerheads on  many issues. 

The dollar's index against a basket of major currencies stood at 90.36, not far off its three-year low of 90.104 touched on January 17. One  reason  often cited by traders for the dollar's climbdown is that its relative yield attraction is at risk as the world's major central banks are seen winding up their stimulus. The would change the interest rate dynamics of the past few years, when the us Federal Reserve was the only central bank raising rates.


Expectations that the European Central bank may wiithdraw its stimulus gained momentum earlier this month after the accounts of its last policy meeting showed it could shift its policy communication early this year.
 but source have told Reuters the ECB is unlikely to ditch a pledge to keep buying bonds at its upcoming meeting on Thursday.
The British pound hit its post-Brexit referendum high of $1.4005, helped by optimism that Britain will reach a favorable divorce deal with the European Union.