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Abe plan a yawner; dollar under ¥100

JIJI

The dollar sank below ¥100 in Tokyo on Wednesday, in pace with Japanese stocks’ retreat on disappointment at Prime Minister Shinzo Abe’s strategic growth measures announced in the afternoon.

At 5 p.m., the dollar was quoted at ¥99.72-73, down from ¥100.28-30 at the same time Tuesday. The euro stood at $1.3077-3079, up from $1.3064-3068 and at ¥130.42-44, down from ¥131.02-04.

The dollar stayed above ¥100 until early afternoon. But the greenback started dropping when reports about the third pillar of Abe’s growth strategy, dubbed “Abenomics,” began to hit the market, traders said.

Investors’ disappointment at the growth measures, unveiled in his speech at a lecture meeting held by Research Institute of Japan, triggered a stock market rout that in turn touched off selling of dollars for yen, according to the traders.

The Nikkei 225 stock average dropped to a fresh two-month low just above 13,000, and the dollar fell below ¥99.40 temporarily.

The third round of Abe’s growth plan “contained nearly nothing new,” said an official of a foreign-affiliated brokerage.

The prime minister failed to clarify how the Government Pension Investment Fund will increase its investment in risk assets.

The lack of such a step “seems to have triggered dollar-selling by disappointed players who had anticipated the GPIF’s increased purchases of stocks and foreign bonds,” said an official of a foreign exchange margin trading service firm.

Now that the closely watched Abe speech was over, the market’s focus has shifted to the U.S. Labor Department’s employment data for May, due out Friday.