Dollar Steadies Amid BOJ Decisions and Middle East Tensions

The dollar appreciated marginally on Tuesday, bolstered by geopolitical developments and a policy decision from the Bank of Japan (BOJ). The BOJ opted to keep short-term rates steady at 0.5% and outlined plans to decelerate its balance sheet drawdown by 2026, a decision closely watched by investors.

Currency markets reacted with volatility, particularly the yen which oscillated before slightly strengthening to 144.70 per dollar. Attention has now turned to BOJ Governor Kazuo Ueda's forthcoming press conference, where he is expected to discuss inflation trends in light of Japan's trade challenges.

Amid broader international tensions, the U.S. dollar retained its gains. President Donald Trump's unexpected early departure from the Group of Seven summit underscored the weight of Middle Eastern conflicts on global sentiment. As central banks prepare to set crucial policy directions, the balance of market movements remains finely poised.

(With inputs from agencies.)