The yen exchanged 0.4 percent from its best level in a month in the middle of assumptions regarding the additional easing measures from today’s Bank of Japan (8301) meeting have already been priced in by investors.
Demand for the U.S. dollar was diminished before a report tomorrow that may display employers in the world’s largest economy boosted fewer jobs last month than in February. The euro dropped versus most of its major peers before European Central Bank officials gather today for a policy meeting. The Australian dollar advances after a report showed retail sales and building approvals increased more than expected in February.
“It’s become very difficult for the BOJ to come up with measures that surprise the market,” said Noriaki Murao, a New York-based managing director of the marketing group at the Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan’s largest listed financial group. “Even if the BOJ shoots fireworks, any yen selling will be limited before the U.S. employment data.”
The yen advances 0.1 percent to 92.97 per dollar as of 11:10 a.m. in Tokyo after jumping 0.4 percent yesterday. It reached 92.57 on April 2, the best state since March 1. Japan’s currency acquired 0.1 percent to 119.39 per euro. Europe’s shared currency gave up 0.1 percent to $1.2842.
Today’s BOJ meeting is the first to be led by Governor Haruhiko Kuroda since he took over from Masaaki Shirakawa last month. Kuroda told lawmakers this week that the central bank will do whatever it can to beat deflation and it will conduct bold monetary easing.
BOJ Assumptions
All 19 economists surveyed, see the BOJ taking some action today. Fifteen see a boost in monthly bond purchases, with 11 giving a numerical predictions. The median is for 5.2 trillion yen ($56 billion) per month, a 50 percent hike on the average during the first quarter.
“Kuroda may be constrained in the amount of stimulus he can deliver,” Spiros Papadopoulos, an economist at National Australia Bank Ltd., wrote in an e-mailed note to clients today. “If markets are dissatisfied with the outcome, the recent pull- back in the dollar-yen will continue.”
Expectations for improved monetary easing under the BOJ’s new leadership have driven the yen down 15 percent in the past six months, the worst performance among 10 developed nation currencies. The dollar advances 2.5 percent over the same period, while the euro surged 0.9 percent.
The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six U.S. trading partners, was moved a notch at 82.759 after surrendering 0.3 percent yesterday. It hits 82.493 on April 2, the least since March 25.
U.S. Jobs
U.S. Labor Department data tomorrow may indicate an improvement of 195,000 in payrolls last month, following a 236,000 advance in February. The jobless rate probably remained at 7.7 percent.
The yield on Treasuries due in a decade was 126 basis points more than that for similar-maturity Japanese government bonds yesterday, the least since March 6.
In Europe, 54 out of 56 economists in a separate poll expect ECB President Mario Draghi and his board to keep euro- area borrowing costs today at a record-low 0.75 percent. Two analysts forecasted a decline to 0.5 percent.
The Australian dollar surged 0.1 percent to $1.0476. The statistics bureau announced today retail sales jumped 1.3 percent, the most in more than three years and kicking the 0.3 percent forecasted by analysts, after a revised 1.2 percent win in January. A separate report indicated that the number of permits granted to build or renovate houses and apartments soared 3.1 percent in February from the previous month, surpassing economist calculations for a 2.5 percent acquisition.
“The retail sales number was extremely strong,” Alvin Pontoh stated, an Asia-Pacific strategist at TD Securities Inc. in Singapore. “It justifies the move higher in the Aussie. The Reserve Bank of Australia said this week that there are signs that economy is responding to previous easing of monetary policy and we’re clearly seeing that evidence today.”
