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Dollar under ¥84 on BOJ easing

JIJI

The dollar fell back below ¥84 in Tokyo on Thursday as the last major domestic event of the year ended with the Bank of Japan Policy Board deciding to implement further monetary easing steps.

At 5 p.m., the greenback was quoted at ¥83.92-92, down from ¥84.37-37 at the same time Wednesday. The euro stood at $1.3212-3214, down from $1.3239-3244, and at ¥110.88-90, down from ¥111.71-74.

The dollar slipped through the ¥84 line in early morning, weighed down by renewed concerns over the “fiscal cliff” problem in the United States amid a standoff between President Barack Obama and Republicans over measures to resolve the issue of mandatory government spending cuts and massive tax hikes.

But after the early buying ran its course, the U.S. unit rebounded to some extent.

The dollar-yen pair showed wild swings immediately after the BOJ announced its decisions in early afternoon to expand its asset purchase program by ¥10 trillion and to study at the next policy-setting meeting a 2 percent inflation target proposed by Shinzo Abe, who will become prime minister next week.

The dollar kept its strength slightly above ¥84 for a while after the volatile moves were over, but it lost ground to around ¥83.80 on renewed selling in midafternoon.

“Players moved to lock in profits in the wake of the BOJ’s announcement because the market already had factored in the ¥10 trillion expansion of the asset purchase program,” said Junichi Ishikawa, foreign exchange analyst at IG Markets Securities Ltd.

Abe’s government to be formed next week is expected to put more pressure on the bank to take aggressive measures to combat deflation.