Yen gains after BOJ policy moves
January 24, 2013, 12:03 am TWN
TOKYO--The yen strengthened in Asian trade Wednesday after the Bank of Japan (BOJ) announced an open-ended easing program and adopted a new inflation target, in line with market expectations.
In Tokyo deals the greenback bought 88.46 yen, against 88.68 yen in New York late on Tuesday, while the euro fetched 117.75 yen from 118.14 yen.
The single currency eased to US$1.3311 from US$1.3321.
The BOJ on Tuesday said it would adopt a 2-percent inflation goal demanded by the country's new government in a bid to beat the deflation that has haunted the world's third-largest economy for years.
It also unveiled an unlimited asset-purchase scheme — similar to the U.S. Federal Reserve's quantitative easing — to start next year as part of a plan to achieve that goal, widely seen as bowing to pressure from Tokyo.
However, dealers were largely underwhelmed, with some analysts criticizing the inflation target's vague timeline and saying 13 trillion yen in planned monthly asset purchases was unlikely to save the limp economy.
The announcement brought an end to the yen's recent fall against the U.S. dollar and euro, which began in November when Shinzo Abe said ahead of a general election he eventually won that he would press for more aggressive BOJ easing.
The U.S. dollar was mostly stronger against other Asia-Pacific currencies, rising to SG$1.2282 from SG$1.2270 on Tuesday, to 9,660 Indonesian rupiah from 9,655 rupiah, and to 53.73 Indian rupees from 53.54 rupees.
The greenback also rose to 1,065.82 South Korean won from 1,063.20 won, to 29.77 Thai baht from 29.75 baht, while it was flat at 40.62 Philippine pesos.
The Australian dollar weakened to US$1.0538 from us$1.0550, while China's yuan fetched 14.22 yen from 14.34 yen.