Yen gains despite BOJ nominee's vow to beat deflation
AFPTOKYO -- The yen strengthened in Asian trade Monday after comments on beating deflation from the government's nominee to lead the Bank of Japan (BOJ) offered “no big surprises,” dealers said.
March 5, 2013, 12:35 am TWN
Longtime BOJ critic Haruhiko Kuroda, an experienced finance veteran, vowed in a speech to parliament that the central bank would reverse years of falling prices, and hit out at previous BOJ management for failing to fix the problem.
The 68-year-old, who was nominated on Thursday, is widely expected to be confirmed by parliament as Japan's top central banker in the coming weeks.
The yen initially slipped after his pledge to do “everything possible” to conquer deflation, signaling the likelihood of a fresh drive for more spending and aggressive monetary easing, which tends to weigh on the unit.
But markets were underwhelmed by his call for action, with easing speculation largely priced in earlier.
The yen has been weakening since late last year as Prime Minister Shinzo Abe swept to power in December pledging to boost the economy. A weaker yen helps the country's exporters by making their exports more competitive.
In Tokyo trade, the dollar weakened to 93.38 yen from 93.59 yen in New York Friday, while the euro fetched 121.52 yen from 121.92 yen.
Against the dollar, the European single currency was also weaker at US$1.3014 from US$1.3027, ahead of a eurozone finance ministers meeting later in the day that was likely to see debate on the troubled bloc's bailout plan.
The dollar was stronger against other Asia-Pacific currencies, firming to SG$1.2454 from SG$1.2372 on Friday, to 1,092.15 South Korean won from 1,084.83 won, and to 9,708 Indonesian rupiah from 9,685 rupiah.
The greenback also strengthened to 54.96 Indian rupees from 54.50 rupees, to 40.76 Philippine pesos from 40.70 and to 29.78 Thai baht from 29.74 baht.