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21-Sep (Bloomberg) — The yen rose against the dollar, reversing the
slide that was the initial reaction to the Bank of Japan saying it would
adopt a more flexible approach to expanding stimulus.
The Japanese currency’s rebound to a more than three-week high suggests
investors are both skeptical officials will achieve their long-term policy
goal of boosting inflation and that they’re already shifting their focus to
the Federal Reserve’s policy decision later today.
The yen earlier dropped more than 1 percent after BOJ Governor Haruhiko
Kuroda and his board said the central bank would move away from a rigid
target for expanding the money supply, while seeking to control bond yields
across different maturities. They pledged to expand the monetary base until
inflation is stable above the authority’s 2 percent target — committing to an
overshoot of consumer-price gains.
“We can be more sure that the BOJ wants to reach inflation, but we can be
less sure that they are willing, or able, to take the necessary steps,” said
Ulrich Leuchtmann, head of currency strategy at Commerzbank AG in Frankfurt.
“I would not be surprised if dollar-yen would come down again in the coming
days.”
The yen climbed 0.2 percent to 101.47 per dollar as of 7 a.m. in New York,
after earlier sliding as much as 1.1 percent to 102.79. It touched the
strongest level since Aug. 26.
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