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Dollar loses early gains in afternoon trade

10 Comments

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 U.S. 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% 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 program 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 U.S. Federal Reserve, with growing speculation it would soon start tapering its own huge stimulus program.

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.

© (C) 2013. AFP

©2022 GPlusMedia Inc.

10 Comments
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world’s third-biggest economy was looking brighter

too bright, Nikkei 225 is dazzled and losing ground....!

0 ( +0 / -0 )

Words are cheap but at least they are not throwing good money after bad.

0 ( +0 / -0 )

The Yen has strengthened nearly 5% in the last week. Hello typesetters. It was at 99.9/$ on Aug. 3

1 ( +1 / -0 )

Agree with Joe - the Yen has got stronger over the last week. 152 to the pound on Mon, 149 now.

2 ( +2 / -0 )

Yen isn't weak enough for my liking. 110 is good. Hook it up, Abe.

2 ( +4 / -2 )

now imagine if the BOJ never did there own quantitve easing like the US, yen would be in the 70s by now. and you still hear US senators crying that Japan manipulating its currency. LOL hypocrites of the century.

-2 ( +1 / -3 )

U/J was 96.7 at 12:00 noon when the BOJ made it's announcement and is currently around 96.3xx, so the yen is strengthening, not easing as written in the headline ..

1 ( +1 / -0 )

Conway - headline is misleading I agree - but getting the info from this sentence In Tokyo midday trading, the dollar fetched 96.76 yen from 96.39 yen in New York Wednesday,it is correct

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In Tokyo midday trading, the dollar fetched 96.76 yen from 96.39 yen in New York Wednesday, while the euro also strengthened to 129.07 yen from 128.55 yen in U.S. trading. The European single currency was flat at $1.3334.

The Yen is right now, 5 hours and 41 minutes after the above quoted rates, is at 96.2533 to the US$ as I type this. Whatever claims were made clearly were just a hiccup and the Yen is still getting stronger. Now too good for Japan Inc. on the export front. :(

1 ( +1 / -0 )

Obama started this currency war. We're almost at 50% unemployment. QE isn't helping. Hyperinflation here we come!

-2 ( +0 / -2 )

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