Business / Financial Markets | CURRENCY MARKET

Dollar drops to around ¥108 in Tokyo trading

JIJI

The dollar moved around ¥108 in Tokyo trading late Thursday, after recovering from below the line due to buying on dips.

At 5 p.m., the dollar stood at ¥108.04-04, down from ¥108.19-19 at the same time on Wednesday. The euro was at $1.1051-1051, slightly down from $1.1054-1055, and at ¥119.41-42, down from ¥119.61-61.

The dollar moved around ¥108.40 in the early morning, as market players viewed the stance of members of the U.S. Federal Reserve’s Federal Open Market Committee on the outlook of monetary policy at a two-day policy-setting meeting that ended on Wednesday as hawkish.

Pressured by dollar selling by export-oriented companies, the greenback fell to around ¥108 in the late morning.

The U.S. currency then temporarily dropped to around ¥107.70, due to disappointment over the Bank of Japan’s decision to forgo an additional monetary easing step at a two-day policy setting meeting that ended Thursday.

In the afternoon, the dollar fluctuated between ¥107.90 and ¥108, with the underside supported by buying on dips.

An official at a foreign exchange margin trading service firm voiced surprise at some FOMC members’ expectation of only one more interest rate cut in 2019.

Pointing to the appreciation of the yen against the dollar from late morning in response to the BOJ’s decision, the official predicted that such moves will not continue, saying that the dollar will likely rise.

The BOJ “succeeded in keeping expectations alive for additional monetary easing,” an official at a major securities company said, apparently referring to a BOJ statement that it will re-examine economic and price developments at its next monetary policy meeting in October.

The official noted that the BOJ statement “worked well” on the market, just when market players were wary of the yen’s strengthening against the dollar.

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