The dollar rose toward ¥93.50 in Tokyo trading Thursday, aided by expectations of additional monetary easing by the Bank of Japan in the future.
The greenback stood at ¥93.43-48 at 5 p.m., up from ¥93.20-21 on Wednesday. The euro was at $1.3386-3388, down from $1.3464-3466, and at ¥125.10-12, down from ¥125.47-49.
The dollar was temporarily supported by speculation about additional BOJ monetary easing after morning data showed that the nation’s real gross domestic product shrank for the third straight quarter in October-December, underperforming the market’s consensus forecast of growth. But the impact of the GDP data proved short-lived.
In midmorning trading, the dollar climbed above ¥93.60, driven by a comment from former BOJ Deputy Gov. Kazumasa Iwata that a correction to the yen’s strength is an essential condition for Japan to attain the inflation target of 2 percent.
The yen’s fall to 90 to 100 to the dollar would represent its “return to equilibrium,” said Iwata, seen as one of the leading candidates to take over the BOJ from Masaaki Shirakawa. He made the remarks in a lecture to a group of lawmakers of the ruling Liberal Democratic Party.
The dollar drew some selling in the early afternoon after the BOJ announced a Policy Board decision to keep its monetary policy unchanged and upgrade its economic assessment. But the U.S. currency showed resilience and rose above ¥93.70 on buybacks.
“The market had priced in the BOJ’s inaction. After dollar selling proved limited, speculation grew about bolder monetary easing under a new governor,” said an official of a major Japanese bank.