News Column

Dollar falls below 101 yen on BOJ chief's bullish remarks

May 21, 2014

Satoshi Iizuka

The U.S. dollar fell below 101 yen Wednesday in Tokyo as bullish remarks by Bank of Japan Governor Haruhiko Kuroda damped expectations for further monetary stimulus by the Japanese central bank.

At 5 p.m., the dollar fetched 100.94-95 yen compared with 101.27-37 yen in New York and 101.38-40 yen in Tokyo at 5 p.m. Tuesday. It moved between 100.81 yen and 101.39 yen during the day, changing hands most frequently at 100.95 yen.

The euro was quoted at $1.3716-3717 and 138.45-49 yen against $1.3696-3706 and 138.80-90 yen in New York and $1.3695-3696 and 138.84-88 yen in Tokyo late Tuesday afternoon.

The dollar hit a three-and-a-half-month low of 100.81 yen during the BOJ chief's press conference in the afternoon, which was broadcast live following the central bank's two-day policy meeting.

Kuroda reiterated his bullish stance over Japan's economic outlook, saying that the BOJ's monetary stimulus is on its expected course while exerting its effects.

"Kuroda's remarks, though nothing new, triggered yen buying as some market participants had expected him to hint at some easing steps," said Yuzo Sakai, manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow.

In its policy-setting meeting that ended shortly before noon, the BOJ decided, as widely expected, to keep intact its current ultraloose monetary policy and left unchanged its assessment of the domestic economy as recovering "moderately."

The minutes of the U.S. Federal Reserve's April 29-30 Open Market Committee meeting are due out later Wednesday during the New York trading day.

"What should be in focus is whether any discussion was made at the Fed meeting on the exit strategy from its quantitative easing, which means steps toward interest rate hikes," said Shinichiro Kadota, foreign exchange strategist at Barclays Bank.

Early Wednesday, the government reported Japan's goods trade deficit totaled 808.9 billion yen in April, shrinking for the first time in 20 months. But market reaction was limited, dealers said.

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Source: Japan Economic Newswire

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