News Column

Dollar trades in lower 103 yen zone after Turkish central bank action

January 28, 2014

TOKYO , Jan. 29 -- ( Kyodo ) _ The U.S. dollar traded in the lower 103 yen zone Wednesday morning in Tokyo , continuing to gain on easing risk aversion following the Turkish central bank's measures to protect the lira from tumbling further. At noon, the dollar fetched 103.14-15 yen compared with 102.88-98 yen in New York and 102.78-79 yen in Tokyo at 5 p.m. Tuesday . The euro was quoted at $1.3657-3661 and 140.88-89 yen against $1.3665-3675 and 140.66-76 yen in New York and $1.3664-3665 and 140.44-48 yen in Tokyo late Tuesday afternoon. The dollar and the euro drew buying against the yen early in the morning as the Turkish central bank's decision to raise its key interest rates reduced the Japanese currency's haven appeal, traders said. The central bank increased its one-week repo rate, which it said will be its main rate for the time being, to 10 percent from 4.5 percent. It made the decision in an emergency policy meeting on Tuesday to prevent the Turkish lira from plunging further. The rate increase "was more than expected," said Yuji Saito , director of foreign exchange at Credit Agricole Corporate & Investment Bank in Tokyo , but the dollar's and euro's gains were limited by Japanese exporters buying the yen. Market players are now retreating to the sidelines ahead of the end of the U.S. Federal Reserve's two-day policy meeting later Wednesday, Saito said. The Fed is widely expected to cut $10 billion from its current $75 billion monthly asset purchases. However, some remain wary of indications the U.S. central bank will accelerate the speed of stimulus tapering or shift its forward guidance for that purpose, which could exacerbate recent drops in emerging currencies, Saito said.

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Source: Japan Economic Newswire

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