TOKYO: The yen rallied in Asia on Friday, rebounding from the previous day’s losses fuelled by a report that Japan would cut corporate taxes to offset the impact of an expected hike in sales tax.
In Tokyo midday trade, the dollar bought 98.72 yen, compared with 98.94 yen late in New York and well below the levels above 99 yen in Asia Thursday.
The euro slipped to 133.10 yen from 133.48 yen, and to $1.3483 from $1.3488.
Japan’s Kyodo news agency said Thursday that Tokyo was considering the business tax cut to allay fears that the flagged rise in the sales levy — to 8.0 percent from 5.0 percent — would hurt the country’s economic revival.
That boosted confidence among traders, who moved out of the safe-haven yen.
However, on Friday Finance Minister Taro Aso threw into question a timeline for any business tax cuts, which he described as a “long-term issue”.
The dollar received a measure of support in New York from data showing an unexpected improvement in weekly figures for US initial claims for unemployment insurance.