* Currencies mostly range-bound as markets await Yellen's
* Fed chief to testify to Congress on Tuesday, Wednesday
* Euro steady even after Draghi warns of strong currency
By Lisa Twaronite
TOKYO, July 15 The dollar edged up against the
yen on Tuesday after the Bank of Japan tweaked its growth
forecast lower, although currency moves were small as investors
waited for Federal Reserve Chair Janet Yellen's congressional
testimony later in the session.
The BOJ kept monetary policy steady as expected and trimmed
its economic growth forecast for the current fiscal year to
March 2015 to reflect soft exports and a slump in household
spending after a sales tax increase.
BOJ Governor Haruhiko Kuroda will address the media at 0630
The dollar inched up about 0.1 percent to 101.62 yen,
rising as high as 101.65 yen and remaining well off last week's
seven-week low of 101.06 yen.
The euro gained about 0.1 percent to 138.36 yen,
solidly above last week's five-month low of 137.50 yen.
Markets will be examining Yellen's remarks during her
congressional appearances on Tuesday and Wednesday for clues on
the timing of interest rate rises by the U.S. central bank,
after U.S. data in the second quarter signalled the economy was
Private-sector jobs and nonfarm payrolls growth in June were
better than economists had expected and the unemployment rate
fell to a near-six-year low of 6.1 percent.
"We're not expecting any surprises from her, but if U.S.
yields fall on her remarks, the dollar could trend lower," said
Ayako Sera, senior market economist at Sumitomo Mitsui Trust
The benchmark 10-year Treasury yield stood at
2.541 percent in Asia, not far from Monday's U.S. close of 2.549
The dollar index was steady at 80.203, holding above
a two-month low of 79.740 touched on July 1.
Comments from other Fed officials have implied that
policymakers are in no rush to tighten, and many investors
expect more of the same from Yellen.
"Going into Fed Chair Yellen's Congressional testimony
tomorrow, investors have bought the view that the Fed is on a
steady-as-she-goes dovish course," Steven Englander, global
head of G10 foreign exchange strategy at CitiFX, said in a note
"Most likely she will deliver as expected, but investors now
take the dovishness for granted to a greater degree than they
did in the past, so we will likely see a limited risk rally if
all goes according to plan," Englander said.
The Fed Reserve will still need to deliver "unusually
accommodative" monetary policy even when the U.S. economy
returns to "where we want it to be", Yellen was quoted as saying
in the New Yorker magazine's July 21 issue.
Later on Tuesday, U.S. retail sales data for June could give
more ammunition to economists predicting improved second-quarter
economic growth. Economists expect retail sales to show a rise
of 0.6 percent, up from 0.3 percent in May, according to a
The euro was steady at $1.3616, showing little
reaction for now to comments from European Central Bank
President Mario Draghi, who told European lawmakers that a
strong currency could drag on a euro zone economic recovery.
Addressing a European Parliament committee in Strasbourg,
Draghi reiterated that the ECB would stick to its accommodative
monetary policy and might take unconventional steps against low
The Australian dollar was treading water at $0.9395
Minutes of the Reserve Bank of Australia's latest meeting
released earlier in the session indicated that it was likely to
keep interest rates at record lows for some time yet, with
policymakers citing uncertainty about whether stimulus alone
would be enough to offset a cooling mining sector and government
(Editing by Eric Meijer and Alan Raybould)