News Column

Dollar stays near 102 yen as BOJ seen unlikely to ease

June 12, 2014

Ryotaro Nakamaru

The U.S. dollar stayed near the 102 yen line Thursday in Tokyo, moving little as market players refrained from actively trading amid speculation that the Bank of Japan will not announce additional monetary easing measures the following day.

At 5 p.m., the dollar fetched 102.07-08 yen compared with 102.02-12 yen in New York and 102.27-29 yen in Tokyo at 5 p.m. Wednesday. It moved between 101.97 yen and 102.14 yen during the day, changing hands most frequently at 102.02 yen.

The euro was quoted at $1.3532-3533 and 138.12-16 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 yen traded narrowly against the dollar in Tokyo trading after an overnight gain.

Market players do not expect the BOJ to announce new easing measures at its two-day policy meeting through Friday as recent economic data signal improvement in the Japanese economy, dealers said.

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

Players were also holding out for the release later in the day of data on U.S. retail sales in May to reinforce the view that the world's largest economy is steadily strengthening.

"The focal point will be whether the figures lead to a rise in interest rates," said Yasuaki Amatatsu, market analyst at the Bank of Tokyo-Mitsubishi UFJ, referring to U.S. long-term rates.

The benchmark 10-year Treasury yield has been slow to recover from an 11-month low hit in late May, sapping the dollar of its appeal.

The euro erased modest gains against the dollar and the yen on lingering effects of the European Central Bank's unprecedented monetary easing announced last week.

The measures, which include the first negative deposit rate by a major central bank, are dragging the euro down against the two currencies and hampering the dollar's rise against its Japanese counterpart, Amatatsu said.

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Source: Japan Economic Newswire

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