By Masayuki Kitano (Reuters Singapore)
SINGAPORE (Reuters) – The dollar touched a two-month low against the yen on Thursday, having tumbled after the minutes of the Federal Reserve’s latest meeting showed some policymakers were concerned about persistently low inflation in a blow to rate hawks.
The greenback nursed its losses after sliding nearly 1.1 percent against the yen on Wednesday, its biggest one-day drop since mid-May.
The minutes of the Fed’s Oct.31-Nov.1 policy meeting showed that Fed policymakers expect that interest rates will have to be raised in the “near term”, reinforcing market expectations for the Fed to raise interest rates in December.
The minutes, however, also highlighted concern among some of the members over the inflation outlook, with the emphasis placed on economic data in determining the timing of future rate rises.
“I think it’s pretty conclusive now, that as we move into 2018, the Fed is going to be focusing on (low) inflation rather than growth so this is still the overriding concern,” said Stephen Innes, head of trading in Asia Pacific for Oanda in Singapore.