Dollar holding just below ¥84

JIJI

The dollar moved narrowly around ¥84 in Tokyo trading Tuesday as market players came to sit on the fences to wait for the Bank of Japan’s policy meeting this week.

At 5 p.m., the dollar was quoted at ¥83.95-95, down from ¥84.00-02 at the same time Monday. The euro stood at $1.3165-3166, up from $1.3155-3157, and at ¥110.51-53, marginally down from ¥110.52-54.

The dollar attracted some purchases in morning trading on the back of expectations for the United States to dodge the “fiscal cliff” yearend budget crisis.

Media reports on concessions made by President Barack Obama and House Speaker John Boehner over a tax hike on wealthy people lifted global stock prices and “allowed a ‘risk-on’ mood to return to the market,” said an official at a major Japanese bank.

Still the dollar-yen pair generally lacked a clear direction as the market was “taking a breather” after exhibiting wild swings in the wake of the Liberal Democratic Party’s landslide victory in Sunday’s Lower House election, said an official of a securities house.

In the afternoon, the dollar moved in a tight range versus the yen amid a wait-and-see mood before the BOJ’s two-day policy meeting starting Wednesday.

The dollar firmed close to ¥84.10 on the news that BOJ Gov. Masaaki Shirakawa and LDP leader Shinzo Abe were going to meet in the afternoon. Abe, who is poised to become the next prime minister following Sunday’s election, has been calling for aggressive monetary easing by the central bank.

At the meeting, Abe directly asked Shirakawa to consider introducing a 2 percent inflation target and conclude a policy accord with the government.