Dollar down against yen as dealers question BoJ power

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TOKYO: The dollar declined against the yen Monday with traders unmoved by a better-than-expected jump in US jobs and manufacturing while analysts doubted the Bank of Japan’s ability to weaken its currency.

Official figures Friday showed non-farm payrolls soared in March and factories ramped up their activity, the latest sign that the world’s top economy is getting back on track.

However, analysts said it was not impressive enough that the Federal Reserve will revise its view that interest rates will not go up before June.

The US central bank in December lifted rates for the first time in nearly a decade and attention has turned to the pace and timing of future hikes.


The BoJ has been going the opposite direction. Having already embarked on a massive bond-buying stimulus, in January it introduced a negative interest rate aimed at stimulating lending.

But the move was criticised as a sign of desperation as bank policymakers run out of effective measures to boost stalling growth and inflation.

“What the BoJ has done up until now has run into the end of its ability to impact dollar-yen,” said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand in Auckland, according to Bloomberg News. “The ability of the BoJ to influence the currency is waning.”

In Tokyo, the dollar fetched 111.49 yen compared with 111.63 yen in New York and 112.17 yen in Tokyo earlier Friday. The dollar is also well down from the 120 yen levels at the start of the year.

The euro fell to $1.1387 and 127.01 yen from $1.1393 and 127.18 yen.

The yen has won support from falling equity markets and as jitters over China’s economy send traders looking for safe investments.

The greenback dipped against most other higher-yielding emerging market currencies, with the South Korean won gaining 0.44 percent, the Malaysian ringgit adding 0.25 percent and the Indonesian rupiah up 0.05 percent. AFP

AFP/BF

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