On Thursday, the value of the U.S. dollar compared to the Japanese yen reached its highest point in 10 weeks before decreasing as investors gained confidence in the Federal Reserve’s careful approach to making further changes to the money supply.

The dollar index, which measures the currency against six major counterparts, including the yen, stayed near an almost two-month high as traders reduced their expectations of U.S. interest rate cuts for the year after strong payroll data was released last week.

According to a Reuters report, the U.S. currency reached 149.54 yen for the first time since August 2 but dropped by 0.3% to 148.82 yen. Meanwhile, the euro remained close to its lowest level since August 13 against the dollar, at USD 1.0936.

The minutes from the most recent Federal Reserve meeting, released overnight, they affirmed the central bank’s commitment to maintaining a healthy job market.

On Wednesday, San Francisco Fed President Mary Daly stated that she was less worried about rising prices than potential harm to the job market. Wall Street’s main indices ended the day higher.

The CME Group’s FedWatch Tool indicated an 85% probability of the Fed reducing rates by 25 basis points at its upcoming policy decision on November 7, with a 15% likelihood of no change. A week prior, markets were certain about a rate cut, with a 35% chance of another half-point reduction.

The dollar index experienced a slight shift, reaching 102.88 by 1045 GMT, marking its highest level since mid-August. The Australian dollar, sensitive to risk, rose by 0.1% to USD 0.6724.

This increase followed a more than 0.3% rise due to an equity rally in China, as the nation’s central bank initiated a swap program to bolster the stock market. China’s finance ministry is scheduled to host a highly anticipated news conference on fiscal policy on Saturday.

The Aussie weakened to its lowest point since September 16 at USD 0.6708 on Wednesday following a flat stimulus announcement by China’s state planner.

Alvin Tan of RBC Capital Markets expects China to announce fiscal stimulus on Saturday, which should be sufficient to support China’s economy.

He anticipates that the stimulus will likely bolster China’s recently depreciated yuan and other Asian currencies, such as the Singapore dollar and the Indonesian rupiah.

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