TOKYO: The dollar rose against the yen in Asian trade on Friday after the Bank of Japan (BoJ) announced more extensive monetary easing than had been anticipated.
The dollar was changing hands at 81.22 yen in Tokyo afternoon trade, up from rates below 81.00 yen before the much-awaited BoJ announcement and 80.96 in New York late Thursday.
Against the euro, the greenback was at $1.3201, strengthening from $1.3240. The single European currency was at 107.20 yen against 107.18 yen.
The central bank decided to take additional easing steps by ramping up its purchases of government bonds and risk assets by a net five trillion yen as part of its long-running bid to end deflation.
The programme of purchasing Japanese government bonds will be boosted by 10 trillion yen, but the bank will reduce its six-month fixed-rate loan provision against pooled collateral by five trillion yen.
It also decided to extend the maturity of Japanese government bonds it buys under its asset purchase programme to up to three years from two years.
The easing measures came as a surprise and could be a supporting factor for the dollar against the yen, said Minori Uchida, senior analyst at the Bank of Tokyo-Mitsubishi UFJ.
Societe Generale Chief Japan Economist Takuji Okubo noted the BoJ extended the time-limit of increasing the asset-purchasing fund to 70 trillion yen to end of June 2013, rather than end of 2012 set for 65 trillion yen.
"This shift of the time-limit diminished the impact of the move. What the BoJ did is not sufficient for it to recover its long lost credibility as a deflation fighter," he told Dow Jones Newswires.
The BoJ is to issue a price outlook report later in the day. Earlier media reports have said the bank will forecast that prices are set to rise less than one percent next year.
Figures released Friday showed inflation in Japan stood at 0.2 percent on-year in March, up from 0.1 percent the previous month. However, the higher cost of energy was the main factor contributing to this rise.
The dollar was mostly lower against other Asian currencies, slipping to Tw$29.23 from Tw$29.38 on Thursday and to 1,134.15 South Korean won from 1,137.40 won.
It also fell to 30.83 Thai baht from 30.87 baht, to 42.44 Philippine pesos from 42.62 pesos and to 9,188.00 Indonesian rupiah from 9,190.00 rupiah, while edging up to Sg$1.2423 from Sg$1.2413.