Yen under pressure in Asia as BoJ wraps up meet
The yen faced selling pressure in Tuesday morning Asian trade as markets keep a close eye on the Bank of Japan which wraps up a two-day policy meeting later in the day.
Tokyo: The yen faced selling pressure in Tuesday morning Asian trade as markets keep a close eye on the Bank of Japan which wraps up a two-day policy meeting later in the day.
The dollar strengthened slightly to 98.94 yen in Tokyo morning trade from 98.87 yen New York late Monday and 98.25 yen in late Tokyo trade the previous day, as markets mull whether the BoJ would extend the time-frame of its stimulus and increase the frequency of bonds its purchases.
Some market participants speculate that the BoJ will extend the length of fixed-rate loans to banks to two years or more from the current one year so that the lenders can buy more Japanese government bonds.
The yen may jump against the dollar if the central bank decides not to introduce such measures, while further easing could weigh on the Japanese unit, which has declined sharply since late last year, analysts said.
"The market expects the BoJ to extend its fund-supplying operation to two years or longer," Junichi Ishikawa, market analyst at IG Securities in Tokyo, told Dow Jones Newswires.
After announcing in April that it would unleash a flood of easy money as part of Tokyo`s bid to drag the country out of long-running deflation, the central bank held pat on fresh measures after its last meeting.
The BoJ meet comes after the European Central Bank and Bank of England held steady after their latest policy meetings last week.
Mixed US economic data has upped speculation that the US Federal Reserve would hold off cutting back on its USD85 billion-a-month bond-buying programme, known was quantitative easing, aimed at stoking the world`s largest economy.
In other trading, the euro also gained on the Japanese currency at 131.11 yen from 131.05 yen while it weakened slightly against the dollar at USD1.3249 from USD1.3254 in US trading.