BR:Dollar loses early gains in afternoon Asian trade
TOKYO: The dollar failed to hold on to early gains against the yen in Asian afternoon trade, after the Bank of Japan kept its monetary easing campaign unchanged.
The greenback slipped to 96.28 yen in Tokyo afternoon trade from 96.39 yen in New York Wednesday, while the euro also lost its morning gains to sit at 128.45 yen from 128.55 yen in US trading.
The European single currency strengthened in afternoon deals to $1.3341 from $1.3334 in New York.
Dealers said currency traders took a cue from the Nikkei 225 stock index turning down in the afternoon to close 1.59 percent lower. Moves in yen trading and the Japanese stock market are closely interlinked as the value of the unit affects the profitability of the country's exporters.
Earlier in the day, Japan's central bank said its board voted unanimously to keep its vast monetary easing programme unchanged after wrapping up a two-day policy meeting.
Easing tends to weigh on a currency so the BoJ's decision initially dragged the yen lower, but it soon changed course.
The BoJ, which unveiled a gigantic bond-buying scheme in April, said the outlook for the world's third-biggest economy was looking brighter, while early signs of rising prices were good news for its efforts to hit a two-percent inflation target in as many years.
Investors are also keeping a close eye on the US Federal Reserve, with growing speculation it would soon start tapering its own huge stimulus programme.
A pull-back on the Fed's monetary easing would shrink the number of dollars in the financial system, which tends to boost demand and the greenback's value.
Currency markets were also keeping a close eye on better-than-expected Chinese trade data.
In other trading, the dollar was lower against other Asia-Pacific currencies.
It eased to 43.58 Philippine pesos from 43.65 pesos the previous day, to 10,286 Indonesian rupiah from 10,304 rupiah, to 31.23 Thai baht from 31.47 baht, to 1,112.26 South Korean won from 1,118.73 won.
It also slipped to Sg$1.2620 from Sg$1.2681 and to Tw$29.93 from Tw$29.95.
The Australian dollar stood at 90.56 US cents, from 90.81 cents.
The Chinese yuan changed hands at 15.74 yen, compared with 15.85 yen.
