China's yuan dipped against the dollar on Friday, staging a corrective pull-back after it hit its strongest post-revaluation levels for two straight days. The yuan ended at 8.0002 to the dollar, down from Thursday's post-revaluation closing high of 7.9964.
It has now risen 1.37 percent since Beijing revalued it by 2.1 percent and depegged it from the dollar in July 2005. Trade was whipped up when the yen hit session highs on market talk that China would announce new currency reforms.
But both the yen and yuan fell back again after a Chinese central bank official told Reuters the statement would not be related to the yuan, but would instead focus on a review of global finance.
Meanwhile, the dollar held near a two-month high against the yen in choppy trade ahead of an expected rise in US interest rates next week and on caution over the fate of Bank of Japan Governor Toshihiko Fukui. In China, the market struggled to interpret comments by central bank adviser Yu Yongding that faster yuan appreciation was possible because a stronger currency could reduce liquidity and make monetary policy easier to manage.
Early on Friday, the central bank set the mid-point of the yuan exchange rate at 8.0026, down from its post-revaluation high of 7.9975 on Thursday. The mid-point is seen as an important policy tool with which the central bank signals its intentions to the market.
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