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Dollar firmer around ¥113.50 in Tokyo on Stiglitz, Kuroda

JIJI

The dollar was firmer around ¥113.50 in Tokyo trading on Wednesday, getting a lift from remarks by Nobel Prize-winning economist Joseph Stiglitz and Bank of Japan Gov. Haruhiko Kuroda.

At 5 p.m., the dollar stood at ¥113.66-67, up from ¥113.05-05 at the same time Tuesday. The euro was at $1.1085-1086, down from $1.1115-1115, and at ¥126.01-02, up from ¥125.69-69.

After hovering around ¥113 in the early morning, the greenback advanced above ¥113.50 later in the morning, following remarks by the two prominent economic figures.

At a meeting with Prime Minister Shinzo Abe and economy-related ministers in Tokyo, the Columbia University professor said it is not the right time to raise the consumption tax in Japan. The tax rate is currently scheduled to be raised from 8 percent to 10 percent in April 2017.

Meanwhile, the BOJ chief told a parliamentary committee that there is “considerable” room for the central bank to expand negative interest rates. The BOJ introduced a negative interest policy earlier this year, imposing a minus 0.1 percent rate on some of private financial institutions’ current account deposits at the central bank.

The dollar extended gains in late trading, briefly topping ¥113.70, on speculative purchases ahead of a monetary policy decision by the U.S. Federal Reserve’s Federal Open Market Committee to be announced in the early hours of Thursday Japan time.

“Some speculation of a possible hawkish (FOMC) statement backed the dollar versus the yen,” said an official at a currency margin trading service provider.

But an official at a major bank said, “The forthcoming statement is expected to be dovish, capping the dollar’s topside.”