By William L. Watts and Carla Mozee, MarketWatch
LOS ANGELES (MarketWatch) ? The U.S. dollar trimmed its loss against the yen Wednesday as investors sorted out the stance by the world?s largest industrialized economies on recent weakness in Japan?s currency.
The ICE dollar index /quotes/zigman/1652083 DXY +0.50% , a gauge of the greenback?s moves against a basket of six major global units, spent much of the session swinging between modest gains and losses. It most recently traded at 80.082, essentially flat from 80.083 in North America late on Tuesday.
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The WSJ dollar index /quotes/zigman/9625991 XX:BUXX +0.28% , a benchmark for the greenback?s moves against a slightly wider basket of currencies, rose to 71.57 from 71.53.
The dollar initially posted little reaction to data that showed U.S. retail sales rose by 0.1% in January. See: U.S. retail sales inch up 0.1% in January .
After straddling the 93-yen level during Asian trading hours, the dollar /quotes/zigman/4868099/sampled USDJPY -0.4224% fetched ?93.42 Wednesday, down slightly from ?93.56 in New York late Tuesday.
The yen rebounded sharply Tuesday after an unidentified Group of 7 official was quoted in a news report as saying markets had misinterpreted a joint statement issued by finance ministers and central bankers from the world?s largest industrialized countries that make up the G-7. The official said the G-7 was concerned about excessive volatility by the yen and that Japan would be a major focus at a meeting of Group of 20 finance ministers and central bankers in Moscow Friday and Saturday. See: Confusion reigns over G-7 position on yen .
Before the rebound, the yen sank against other major currencies after a statement from G-7 officials was interpreted as a tacit endorsement of Japanese policies aimed at weakening the yen.
Sebastien Galy, currency strategist at Soci?t? G?n?rale, said the take-away from the G-7 statement remained that policy makers are mostly content to see the yen decline as long as it?s the result of domestic policies aimed at battling deflation.
/conga/story/misc/investing.html 249660?The subtext for the rather non-eventful G-7 statement is that the consequences of domestic policies for the rest of the world are of limited importance. It justifies the stance taken by the U.S., U.K., Japan or Switzerland, with the last odd man out the euro zone,? Galy said.
The euro /quotes/zigman/4867933/sampled EURUSD -0.8300% traded at $1.3448, compared with $1.3449 late Tuesday.
Strategists said there remains a possibility G-20 officials will voice their opposition to the yen?s recent depreciation ? a factor that aids Japan?s exporters but could hurt competitors from other nations. See blog: Yen?s boon to Japan needn?t be S. Korea?s bane .
However, some analysts said that unless the G-20 pressured Tokyo over the weak yen, the Japanese currency might see further declines.
?It seems logical that Japan will be questioned in the upcoming G-20 meeting this weekend on its moves to weaken the [yen],? said Stan Shamu, a strategist at IG Markets in Melbourne.
?However?it?s all been words and rhetoric? so far, he said. So ?we feel [dollar-yen] still has upside, and buying dips on any disappointment from the G-20 could potentially be a good way to go,? said Shamu.
/quotes/zigman/1652083
US : U.S.: ICE Futures U.S.
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/quotes/zigman/9625991 XX : WSJ Index
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/quotes/zigman/4868099/sampled US : ICAP Currencies
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/quotes/zigman/4867933/sampled US : ICAP Currencies
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Source: http://www.marketwatch.com/story/dollar-extends-fall-against-yen-focus-on-g20-2013-02-13
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