The dollar retook ¥88 in Tokyo Thursday, backed by speculation that the Bank of Japan will ease its monetary policy further.
At 5 p.m., the dollar was quoted at ¥88.27-27, up from ¥87.47-49 at the same time Wednesday. The euro was at $1.3065-3070, down from $1.3076-3079, and at ¥115.33-36, up from ¥114.34-44.
Many market players expect the dollar to rise further against the yen after the Japanese government made an official request for stronger cooperation with the central bank at the Council on Economic and Fiscal Policy, a powerful panel, on Wednesday, traders said.
Dollar purchases were also spurred by increasing risk appetite among investors that stems from the buoyancy of stock markets in Asia, including Tokyo, the traders said.
As a dollar-positive factor, the traders also cited the yen’s weakness against other currencies. The Australian dollar exceeded ¥93 for the first time since September 2008.
In addition, Japanese importers show their willingness to buy dollars now after straddling the fence during the currency’s recent upward march, a bank-linked brokerage official said.
The dollar has been in an adjustment phase for a few days, but now many participants believe the phase is over, traders said.
The greenback drew purchases as soon as it fell below ¥88 on Wednesday, an official of a foreign exchange margin trading service firm said.
“Players have finished testing (the dollar’s) lows for now, and they are looking at the upside,” the official said.
Market players are awaiting the outcome of the European Central Bank’s monetary policy meeting and a news conference by ECB President Mario Draghi later in the day, traders said.