News Column

Dollar around 102 yen as BOJ seen waiting to take additional easing

June 11, 2014

The U.S. dollar straddled the 102 yen line Thursday morning in Tokyo, with market players finding little incentive to take strong positions amid speculation that the Bank of Japan will forgo additional easing measures the following day.

At noon, the dollar fetched 102.10-11 yen compared with 102.02-12 yen in New York and 102.27-29 yen in Tokyo at 5 p.m. Wednesday.

The euro was quoted at $1.3543-3544 and 138.27-29 yen against $1.3526-3536 and 138.06-16 yen in New York and $1.3537-3538 and 138.45-49 yen in Tokyo late Wednesday afternoon.

The safe-haven yen moved little against the dollar and the euro in Tokyo morning trading after an overnight gain versus both currencies on falls in U.S. and European stocks.

Market players do not expect the BOJ to announce further easing measures coming out of its two-day policy meeting starting Thursday, amid recent economic data signaling improvement in the Japanese economy, dealers said.

"Some are speculating that the BOJ won't announce it in July either and will wait until October, but it's hard to guess," said Toru Moritani, chief market economist at Sumitomo Mitsui Banking Corp.

The U.S. currency on Thursday had little support from benchmark 10-year Treasury yields, which halted its recovery from an 11-month low hit in late May.

Overnight reports that first-quarter U.S. gross domestic product data may be revised downward from an earlier reported 1.0 percent contraction due partly to weak annualized healthcare spending data.

The report led market players away from equities and into the safety of bonds, Moritani said.

But the reaction was temporary, he said, adding the dollar is likely to gain the upper hand versus the yen in the longer term as U.S. long-term interest rates are expected to rise.

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Source: Japan Economic Newswire

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