ET:Dollar picks up in Asia after sell-off from BoJ move
TOKYO: Traders moved back into the dollar Wednesday afternoon, reversing a slump in New York that was fuelled by the Bank of Japan's decision to hold off launching fresh economic stimulus measures.
The greenback fetched 96.72 yen in Tokyo, after it sank to 96.01 yen in New York on the back of the BoJ decision. However, it is still well down from the 98 yen level on Tuesday in Tokyo.
Easing measures tend to weaken the yen and markets were left disappointed after Japanese policymakers opted not to expand a huge bond-buying programme unveiled in April to stoke growth.
The BoJ on Tuesday said the world's third-largest economy was "picking up".
"The Bank of Japan's policy board was content simply to upgrade its economic assessment," said London-based Capital Economics.
"This disappointed those hoping for further monetary easing in response to the recent volatility in financial markets."
Worries about turmoil in global markets and a winding down of central bank policy measures had pushed traders toward the safe-haven yen.
Last week the European Central Bank and Bank of England stood pat after monthly policy meetings.
Investors are looking for clues about when the US Federal Reserve may taper off its $85-billion-a-month bond buying programme, known as quantitative easing, which was designed to stoke the world's biggest economy.
In Tokyo, covering short positions on dollar bets and buying from importers who pay for overseas goods with the greenback supported the US unit, a senior trader at a trust bank told Dow Jones Newswires.
The euro also strengthened to 128.85 yen from 127.81 yen the previous day, although it eased slightly to $1.3301 from $1.3311.
The dollar was mixed against other Asia-Pacific currencies Wednesday.
It weakened to Sg$1.2567 from Sg$1.2603 on Tuesday, to 58.21 Indian rupees from 58.65 rupees, and to Tw$29.88 from Tw$29.91.
It also slipped to 9,933 Indonesian rupiah from 10,094 rupiah and to 43.10 Philippine pesos from 43.12 pesos, while it firmed to 1,133.66 South Korean won from 1,133.60 won and to 31.13 Thai baht from 30.91 baht.
The Australian dollar edged up to 94.34 US cents from 94.11 cents while the Chinese yuan slipped to 15.76 yen from 15.99 yen.
