COZforex: The dollar pushed higher against the yen and the Swiss franc on Monday, as mounting expectations for a reductions to the Federal Reserve’s stimulus program this week underpinned dollar demand.

USD/JPY hit highs of 102.94, and was last up 0.21% to 102.54, recovering from seven week lows of 101.76 hit earlier on Monday. Meanwhile, USD/CHF was up 0.23% to 0.8963, recovering from three-week lows of 0.8902 reached on Friday.

Investors were turning their attention to the outcome of the Fed’s monthly meeting on Wednesday, amid expectations for a reduction in its bond buying program to USD65 billion from the current USD75 billion.

Demand for the traditional safe haven yen continued to remain supported is spite of some signs of stabilization in emerging markets.

Investor sentiment improved as a broad based selloff in emerging market currencies stalled after Turkey’s central bank announced an emergency meeting on Tuesday. The announcement came after the lira hit the latest in a series of record lows against the dollar on Monday.

Emerging market currencies have been hard hit since the Fed began scaling back its asset purchase program, while worries over political instability and the outlook for growth for some countries also weighed.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched down 0.04% to 80.52.

(COZ forex UK)