Dollar hits 20-yr highs as BOJ sticks to easing

Jiji Press

12:45 JST, April 14, 2022

TOKYO (Jiji Press) — The dollar topped ¥126 in Tokyo trading Wednesday, hitting levels unseen since May 2002, with the Bank of Japan sticking to its accommodative monetary policy stance.

At 5 p.m., the dollar stood at ¥126.05-06, up from ¥125.51-51 at the same time Tuesday. The euro was at $1.0837-0837, down from $1.0870-0870, and at ¥136.59-60, up from ¥136.42-47.

The dollar was firmer from the morning on buying by Japanese importers and a rise in U.S. Treasury yields in off-hours trading.

The greenback broke through the ¥126 threshold in the afternoon after BOJ Gov. Haruhiko Kuroda said in a speech that the central bank would maintain its current monetary easing policy.

The comments by Kuroda were “weak as a warning against the yen’s depreciation,” an official of a Japanese bank said.

The dollar is on an uptrend against the yen, against a backdrop of the widening difference between U.S. and Japanese interest rates, reflecting the U.S. Federal Reserve’s monetary tightening moves.

Meanwhile, Tokyo stocks rebounded sharply, supported by buybacks as U.S. inflation worries receded.

The Nikkei average of 225 selected issues listed on the Tokyo Stock Exchange’s Prime market climbed 508.51 points, or 1.93%, to close at 26,843.49, after shedding 486.54 points Tuesday.

The broader TOPIX index advanced 26.43 points, or 1.42%, to finish at 1,890.06, following a 26.01-point drop the previous day.

“Excessive wariness over inflation and high interest rates eased” after Tuesday’s release of the U.S. consumer price index for March, which was within market expectations, said Kazuo Kamitani, strategist at Nomura Securities Co.

Tech and other stocks especially attracted buying after the Nikkei average gave up around half of its rapid gains the previous month.

Sentiment in the Tokyo market was also brightened by a rise in U.S. stock index futures in off-hours trading, market sources said.

However, Masayuki Otani, chief market analyst at Securities Japan Inc., said that the market’s upswing on the day was “merely a technical rally.”

“Fears of a further fall remain, given bleak external conditions that have pushed stocks down,” Otani added.

On the Prime section, gainers outnumbered decliners 1,516 to 279, while 44 issues were unchanged. Volume inched down to 1,165 million shares from Tuesday’s 1,175 million shares.