News Column

Dollar wavers in upper 101 yen in morning before BOJ chief's remarks

June 12, 2014



The U.S. dollar traded narrowly in the upper 101 yen zone Friday morning in Tokyo, reacting little to the Bank of Japan's decision to keep its policy steady, as investors awaited the BOJ chief's press conference later in the day for trading clues.

At noon, the dollar fetched 101.79-80 yen compared with 101.66-76 yen in New York and 102.07-08 yen in Tokyo at 5 p.m. Thursday.

The euro was quoted at $1.3556-3560 and 138.00-01 yen against $1.3546-3556 and 137.81-91 yen in New York and $1.3532-3533 and 138.12-16 yen in Tokyo late Thursday afternoon.

The dollar recovered some of its lost ground in the morning after falling about half a yen overnight on weaker-than-expected U.S. economic data and worries over rising tension in Iraq.

The U.S. government data showed Thursday that retail sales increased 0.3 percent in May, undershooting the market consensus of a 0.6 percent rise, and initial claims for state unemployment benefits rose a more-than-expected 4,000 to a seasonally adjusted 317,000 last week.

Trading was slow in Tokyo, however, with the dollar confined to a tight range near 101.80 yen throughout the morning, even after the BOJ said its policymakers decided at its two-day meeting from Thursday to keep its monetary policy steady.

The euro was also stuck around the 138 yen line.

Dealers said the policy decision was widely expected and market attention was on how BOJ Governor Haruhiko Kuroda will evaluate at a press conference in the afternoon recent economic conditions following the April 1 consumption tax hike in the country.

Kuroda has expressed confidence in achieving the BOJ's 2 percent inflation target, leading some investors to scale back expectations for further monetary easing, providing support to the yen, said Yuzo Sakai, manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow.

"With (Japanese) economic data for April and May not painting a pessimistic future, it is hard to imagine that Mr. Kuroda will change his previous stance," he said.



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Source: Japan Economic Newswire


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