* Currencies mostly range-bound awaiting Yellen's testimony
* Fed chief to testify to Congress on Tuesday, Wednesday
* Euro steady even after Draghi warns of strong currency
By Patrick Graham
LONDON, July 15 The yen eased on Tuesday after
the Bank of Japan sounded some cautious notes on growth but
stopped well short of hinting at a new bout of money-printing.
In Europe, sterling traded near its lowest in two
weeks against the dollar before inflation data, while the euro
resisted a warning from European Central Bank chief Mario
Draghi that it was too strong.
However, moves were minimal across the board, as investors
waited for congressional testimony from Federal Reserve Chair
Janet Yellen later in the day.
The dollar inched up about 0.1 percent to 101.62 yen,
rising as high as 101.65 yen and well off last week's seven-week
low of 101.06 yen. The euro was up slightly at 138.32 yen
, above last week's five-month low of 137.50 yen.
"The BOJ have essentially backed off the idea of
quantitative easing for now but are sending some cautious
signals on growth," said Simon Derrick, head of currency
strategy at BNY Mellon.
"Everything is stable and we are heading slowly and jerkily
back towards higher inflation."
The BOJ kept monetary policy steady as expected and trimmed
its economic growth forecast for the fiscal year to March 2015
to reflect soft exports and a slump in household spending after
a sales tax increase.
BOJ chief Haruhiko Kuroda told reporters Japan was only
halfway to meeting the 2 percent price target and the bank would
maintain the quantitative easing programme until the target was
By contrast, he added, the Fed was gradually moving towards
policy tightening and he saw no reason for the yen to strengthen
against the dollar.
The dollar index was steady at 80.174, holding above
a two-month low of 79.740 touched on July 1.
Markets will examine Yellen's remarks before congress on
Tuesday and Wednesday for clues on the timing of interest rate
rises, after U.S. data in the second quarter signalled the
economy was gaining momentum.
Private-sector jobs and non-farm 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
2.53 percent, below Monday's U.S. close of 2.549 percent.
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.
Later on Tuesday, U.S. retail sales data for June could give
more ammunition to economists predicting improved second-quarter
growth. Economists polled by Reuters expect retail sales to show
a rise of 0.6 percent, up from 0.3 percent in May.
The euro was steady at $1.3620, showing little
reaction to comments from ECB President Draghi, who told
European lawmakers a strong currency could drag on a euro zone
(Additional reporting by Anirban Nag and Lisa Twaronite,
editing by Nigel Stephenson)