Yen gains in Asia after BoJ wraps up meeting

TOKYO- The yen extended its gains in Asia Tuesday as the Bank of Japan stood pat on its monetary easing programme while it assesses the impact of a sales tax rise on the world’s third-largest economy.

The dollar slipped to 102.90 yen in Tokyo midday trade from 103.09 yen in New York Monday, while the euro also weakened to 141.45 yen from 141.65 yen in US trade.

The European single currency bought $1.3743, little changed from $1.3740.

The dollar has been under pressure after lackluster US jobs data last week cut expectations of tighter monetary policy from the Federal Reserve, which would be a plus for the greenback.

On Tuesday, Japan’s central bank acknowledged that an April first national sales tax hike to 8.0 percent from 5.0 percent — the first rise in 17 years — was having an impact on the economy but it maintained its upbeat assessment.

“Japan’s economy has continued to recover moderately as a trend, albeit with some fluctuations due to the consumption tax hike,” the BoJ said in a statement.

“Private consumption and housing investment have remained resilient as a trend with improvement in the employment and income situation,” it added.

While the bank held off further easing measures, which would tend to weaken the yen, currency markets are now looking to BoJ chief Haruhiko Kuroda’s post-meeting press briefing Tuesday afternoon for clues about future easing.

The last time Japan brought in a higher sales levy, in 1997, it was followed by years of deflation and tepid economic growth that defined the country’s protracted slump.

The threat to consumer spending had boosted speculation that BoJ policymakers would be forced to act sooner than later to counter any slowdown.

The BoJ’s move to inject vast sums of money into the financial system is a cornerstone of Prime Minister Shinzo Abe’s policy blitz aimed at reversing years of deflation and lacklustre growth.