Yen rises in Asia after central bank of Japan holds fire on new easing
May 1, 2014, 12:03 am TWN
TOKYO--The yen ticked up in Asia on Wednesday as the Bank of Japan (BOJ) held off fresh monetary easing, despite fears that Japan's recovery is faltering on the back of tepid data and a recent sales tax rise.
In afternoon Tokyo trade, the dollar weakened to 102.50 yen, down from 102.64 yen in New York on Tuesday.
The euro was also weaker at US$1.3807 and 141.51 yen, from US$1.3811 and 141.75 yen in New York.
BOJ policymakers also lowered their growth expectations for the world's number three economy, saying it would expand 1.1 percent in the fiscal year to next March, down from an earlier 1.4 percent forecast, according to the BOJ's semi-annual outlook report which gauges the median of members' views.
However, their feeling that inflation would come in at 1.3 percent over the same time period was unchanged from a previous forecast.
Some analysts questioned the upbeat inflation view.
“I wonder how they would explain the price increase while revising down the growth forecast,” Takeshi Minami, chief economist at Norinchukin Research Institute, told Dow Jones Newswires.
Prices tend to increase when economies improve and demand for goods increases.
“This gives me the impression that the inflation figures are artificially crafted,” he added.
Overnight, the dollar rose against the euro after prices in Germany declined month-over-month, renewing concerns about low inflation in the eurozone.
The policy-setting Federal Open Market Committee (FOMC) was expected to announce that the U.S. central bank will cut US$10 billion from its monthly bond-purchase stimulus, bringing it to US$45 billion. The FOMC was virtually certain to keep its key interest rate near zero, where it has been for more than five years.
In other trading, the dollar rose to 44.56 Philippine pesos from 44.45 pesos on Tuesday, to SG$1.2567 from SG$1.2561, to 1,033.23 South Korean won from 1,031.16 won, and to 32.33 Thai baht from 32.27 baht.
It slipped to 11,567.50 Indonesian rupiah from 11,585 rupiah.
The Australian dollar rose to 92.86 cents from 92.47 U.S. cents while the Chinese yuan eased to 16.36 yen from 16.39 yen.