The U.S. dollar firmed up against the Japanese yen as the outcome of the Federal Reserve’s ongoing meeting takes centre stage. The greenback gained against other major currencies as well including the euro and the British pound.

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Dollar pushes higher

The U.S. Dollar traded 0.44% up against the yen at 113.63 while the euro and sterling slipped 0.19% and 0.24% to 1.1086 and 1.4116 against the greenback respectively. Though markets are expecting that the Fed will stay put as far as its policy decision is concerned, there are several analysts who believe that today’s meeting could hint at interest rate hikes in the ensuing weeks.

As per the market consensus, the Fed might announce the first rate hike of the year in June. The Fed had raised interest rates last year in December for the first time in a decade. It is to be noted that higher interest rates fetch a higher yield on the dollar, making it more attractive over other assets.

Disappointed with BOJ’s timing

A day earlier the Bank of Japan had kept its policy rates unchanged but had lowered its expectations about economic growth for the country. The central bank highlighted the weakness in the region’s trade due to weakness in other emerging economies. Most forex traders were unsettled following the decision as they felt that the bank is causing extreme fluctuation between the yen and the dollar due to random policy announcements.

The dollar was also trading higher against the Swiss Franc by 0.12% to 0.9884. Meanwhile, the British Pound was under pressure as uncertainty remains over the outcome of the upcoming referendum that will decide if Britain will exit the European Union or remain a part of it.

The U.S. Dollar Index remained higher against the major currencies as it traded 0.18% up at $96.83 during the late Asian hours.