Dollar holds steady, Fed stimulus in focus

TOKYO: The dollar held steady in Asia on Wednesday as investors await the Federal Reserve's decision on whether to start reducing its massive stimulus and by how much.

In afternoon Tokyo trade the greenback edged up to 99.19 yen from 99.14 yen in New York Tuesday.

The euro was at $1.3360 and 132.51 yen against $1.3356 and 132.38 yen, helped by strong German economic data.

The dollar was likely to stay under the 100-yen mark in Asia before the outcome of the Fed's two-day policy meeting later in the day, said Osao Iizuka, head of foreign exchange trading at Sumitomo Mitsui Trust Bank.

"Because of uncertainty (about) the result, traders are opting to square their positions instead of taking fresh bets," Iizuka told Dow Jones Newswires.

The Fed is widely expected to scale back its $85 billion per-month bond-buying programme, with some analysts saying the market had already factored in a $5-$15 billion reduction in the scheme.

The initial dollar-yen reaction to the Fed's decision may hinge on how the US stock market reacts, Iizuka said.