The dollar was top-heavy to trade below ¥91 in late Tokyo trading Monday, after briefly rising above the threshold in overseas trading Friday on the back of growing expectations for further monetary easing by the Bank of Japan.
The dollar stood at ¥90.70-71 at 5 p.m., compared with ¥90.53-54 at the same time Friday. The euro was at $1.3432-3432, up from $1.3407-3412, and at ¥121.84-91, up from ¥121.40-42.
In New York on Friday, the greenback climbed to as high as ¥91.20, the highest level since June 2010, after weak Japanese consumer price data stoked expectations that the BOJ will take more steps to achieve its 2 percent inflation target it adopted last week. The euro also hit a 21-month high of ¥122.78 at one point.
Inheriting its strength from the overseas market, the U.S. unit briefly advanced to around ¥91.20 in early Tokyo trading Monday.
But the dollar failed to sustain the gains as “speculators moved to sell to lock in profits,” an official of a major foreign bank said.
The dollar then turned up to around ¥91.10, but fell back to around ¥90.60 in late trading in line with participation by European players, market sources said.
The market reacted little to Prime Minister Shinzo Abe’s policy speech at the opening of the Diet session on Monday.
“Abe’s remarks about monetary policy in the speech were within what he has already been saying, and he did not go deeper into the topic,” said an official of a bank-affiliated brokerage.
Market participants found it difficult to make major moves ahead of key events this week, including the U.S. Federal Reserve’s policy-setting meeting Tuesday and Wednesday, and the U.S. Labor Department’s announcement of January jobs data on Friday, said an official of a Japanese securities house.
Abe reiterated in his speech that the government will work “more closely” with the BOJ to restore the country’s economy.
“Monetary-easing expectations were fueled in the market also due to less critical comments (about the yen’s rapid drop) from overseas (leaders) in Davos,” said a senior dealer at a major Japanese bank, referring to the annual World Economic Forum.
Information from Kyodo added