LONDON: The yen rose broadly on Tuesday after monetary easing steps from the Bank of Japan's disappointed some market players who had positioned for a more aggressive increase in asset purchases.
The BOJ increased its monetary stimulus for the second monthly in a row, this time by 11 trillion yen ($138.5 billion).
"It was a very sceptical response to the BOJ policy meeting, made worse by the fact they have revised lower the growth and inflation outlook.
That has seen the yen unwind a lot of the softer tone we saw going into this meeting," said Jane Foley, senior currency strategist at Rabobank.
The dollar hit a one-week low of 79.25 yen, breaking below its 200-day moving average at 79.52, important chart support.
It was last down 0.4 percent on the day at 79.45 yen.
Some strategists said Friday's four-month peak of 80.38 would act as resistance for the dollar, and further moves in the safe-haven yen would depend on how developments in the United States and the euro zone affected investor appetite to take on risk.
"The dollar has probably hit a near-term peak last week. After the BoJ's easing, the market's focus will probably move on to whether the Federal Reserve will take steps in December to deal with the fiscal cliff," said Ayako Sera, senior market economist at Sumitomo Trust Bank.
The dollar was likely to stay trapped in its well-worn trading range around 77.50-80 yen, she added.
The euro also slipped against the Japanese currency, to a two-week low of 102.175 yen, before paring losses to trade down 0.2 percent at 102.78 yen.
Comments
Comments are closed for this article.