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Greenback plunges below ¥93.50

JIJI

The dollar fell below ¥93.50 in late Tokyo trading Monday, pushed down by sales unleashed by a steep fall in Japanese stock prices.

At 5 p.m., the dollar was at ¥93.42-44, down from ¥94.04-07 at the same time Friday. The euro stood at $1.2813-2815, against $1.2811-2813, and at ¥119.71-14, down from ¥120.48-52.

Early in the morning, the dollar rose near ¥94.40 on the back of strong expectations for the Bank of Japan’s additional monetary policy steps, traders said.

But the early buying spree soon fizzled out and selling took the upper hand on weaker than expected readings in China’s purchasing manager index at manufacturers for March, they said.

Another dollar-negative factor was the weakness of the Tokyo stock market. After slipping below ¥94 by noon, the greenback fell past ¥93.50 in late trading as the Nikkei 225 stock average accelerated its downswing in the afternoon.

“Many overseas markets have been closed for Easter holidays, and this led to thin trading in Tokyo, adding fuel to the dollar’s weakness,” an official at a major Japanese bank said.

Some market players moved to sell dollars in late trading to take profit ahead of the BOJ’s two-day monetary policy meeting from Wednesday, after the U.S. unit continued to rise on expectations for further easing by the central bank, an official at another major Japanese bank said.

The market was little affected by the BOJ’s “tankan” quarterly business sentiment survey for March, released Monday morning.

The latest tankan showed that the headline diffusion index for large manufacturers’ current business conditions came to minus 8, better than minus 12 in the previous tankan in December, marking the first improvement in three quarters.

There is no change in investors’ view that the BOJ would take additional easing steps regardless of the results of the tankan survey, said an official at a foreign exchange margin trading service firm.

Many market players are likely to take a wait-and-see stance ahead of the BOJ’s policy meeting and the release of the U.S. government’s March jobs data on Friday, traders said.