Dollar claws back some losses against yen in Asia

TOKYO- The dollar on Wednesday edged up against the yen after tumbling in New York trade after the head of the Bank of Japan poured cold water on hopes it will add to its stimulus programme in the near future.

In Tokyo midday trade, the greenback bought 101.89 yen, up from 101.75 yen late in New York but still well down from 102.90 yen in Tokyo earlier Tuesday.

The euro was at 140.51 yen and $1.3789, compared with 140.44 yen and $1.3797 in New York.

Analysts said appetite for risk was recovering, supporting the dollar, as investors look to the US and European central banks for hints about future policy moves.

Mediocre US jobs data last week has capped expectations that the US Federal Reserve would speed up the taper of its asset-purchasing stimulus, which would be a plus for the greenback.

“Today’s focus will be on minutes from March FOMC (Federal Open Market Committee) and speeches by officials from both Fed and ECB as they are likely to provide the market with more hints on the monetary policy of the major central banks going forward,” Credit Agricole said.

The yen jumped Tuesday after Japanese central bank chief Haruhiko Kuroda told a news conference that the economy was getting back on track and a sales tax that kicked in on April 1 would not hurt a nascent recovery, despite warnings to the contrary.

“The sales tax hike is expected to shake growth temporarily, but the bank believes the positive cycle in the Japanese economy will not be stopped and the economy will continue to recover moderately,” Kuroda told reporters Tuesday after a two-day bank policy meeting.

“I am not considering taking additional easing measures at this point, because the economy is steadfastly moving towards reaching the stable 2.0 percent inflation goal and that I don’t think there is a need for additional easing measures.”

The euro faced downward pressure after International Monetary Fund chief economist Olivier Blanchard said European Cental Bank action was needed “soon” to avert deflation in the eurozone.

He added at the launch of the IMF’s World Economic Outlook report that the bank was “considering a number of measures (including) negative interest rates, quantitative easing, securitisation programmes of various sources”.