The US dollar tumbled against the Japanese yen on Friday after the Bank of Japan merely tweaked its monthly asset-purchase program, suggesting to traders that the central bank may not ease policy as much as expected. The BoJ set up a program to buy exchange-traded funds, extend the maturity of bonds it owns to around 12 years and increase purchases of risky assets. Analysts said, however, that the move was minor and did not amount to a significant change to the bank's stimulus.
The move hurt the dollar against the yen, since traders viewed it as an indication that the BoJ may be less likely to ease monetary policy further. The dollar has gained against the yen in recent months on the view that the Federal Reserve's path of raising interest rates and the BoJ's path of more potential stimulus would support the greenback since it would drive more investment flows into higher-yielding US assets.
"What (the BoJ) did was tame, and arguably worse than nothing, as it shows a weak hand," said Jens Nordvig, global head of FX strategy at Nomura in New York. The dollar, which had hit a more than two-week high of 123.590 yen after the announcement, was last down 0.94 percent at 121.405. The euro was last up 0.26 percent against the dollar at $1.08530. The dollar index, which measures the greenback against a basket of six other major currencies, was last down 0.5 percent at 98.773, dipping from a two-week high of 99.294 hit Thursday in the wake of the Fed's first rate hike in nearly a decade. The dollar was last down 0.26 percent against the Swiss franc at 0.99400 franc.
Comments
Comments are closed.