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Currencies: Dollar up against yen on report BOJ planning fresh stimulus

October 30, 2015

Via: itCurated
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The dollar was higher against the yen in choppy Asia trade Friday, supported by a local media report that the government is putting together a fresh fiscal stimulus in the form of a supplementary budget exceeding Y3 trillion ($25 billion).

The greenback USDJPY, -0.29% was at ¥120.82 compared with ¥121.11 late Thursday in New York.

Earlier in the session, short-covering kicked in to help bring the greenback back from its low after the Bank of Japan’s decision to stand pat.
The dollar later gained further traction on a report by the Nikkei financial daily that the Japanese government is planning to draw up a supplementary budget worth more than ¥3 trillion for the fiscal year ending March 2016 and won’t issue new government bonds to finance it.

Amid speculation that the BOJ would go ahead with monetary easing as the growth outlook darkened and the central bank’s inflation target looked increasingly elusive, the central bank decided to keep its policy unchanged. The central bank left its annual asset purchase target unchanged at Y80 trillion, its tool for decisively overcoming more than a decade of deflation. The report helped push up the benchmark Nikkei Stock Average NIK, +0.78% , which rose a solid 1.2% midday.