Former BOJ official, Mitsuru Iwamura, now a Waseda University professor, has gone as far as suggesting plans on how the bank should exit stimulus.
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The comments could push Japanese stock indices down from seven-week highs on Friday. Investors are keen for hints on his next policy step as prices fall and growth wanes in the world’s third-largest economy.
Analysts said the move lower in the U.S. dollar against the yen was likely based more on technical positioning and “steam being let out of the dollar’s rally”, than expectations that the BOJ is rethinking its bias to ease monetary policy. The move would, in theory, trigger spending more effectively than quantitative easing measures like the purchase of bonds held by banks. Kuroda may have changed his opinion since he gave the interview on June 17, Lawler added.
In the oil market, Brent crude LCOc1 settled down 97 cents, or 2.06 percent, at $46.20 a barrel. If the yen extends its downtrend, it is likely to find support around 124.00 against the euro, 113.00 against the franc and 111.00 against the greenback. Eastern Time, followed by Draghi’s news conference at 1:30 p.m. London time, or 8:30 a.m. The Bloomberg Dollar Spot Index was little changed.
Wednesday, the yen fell 0.13 percent against the euro, 0.29 percent against the pound, 0.45 percent against the US dollar and 0.23 percent against the franc. Futures put the chance of a Federal Reserve interest-rate increase this year at 45 percent, up from 9 percent at the end of June.
With the euro moored to a range of around $1.10-$1.12, that has chiefly been playing out in the dollar-yen exchange rate.
Oil eased lower after government data signaled that the USA will end the summer-driving season with ample supplies while investors await signs of additional central bank stimulus.
In the Asian trading, the yen fell to near 1-month lows of 118.39 against the euro, 108.94 against the Swiss franc and 107.49 against the US dollar, from yesterday’s closing quotes of 117.71, 108.21 and 106.86, respectively.
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Gold rebounded from a three-week low after the European Central Bank said it may add stimulus as needed once it has a clearer picture of the Brexit vote’s economic impact. In Europe, the Stoxx 600 Index was 0.3% lower at 6:06am ET, having fallen as much as 0.6% in the immediate aftermath of the broadcasting of Kuroda’s radio interview.
