Tokyo - The yen was under pressure on Wednesday as poor Japanese trade data stoked speculation that the Bank of Japan may unleash another round of easy money stimulus to boost the world's number three economy.
There are growing fears that Japan sank into recession in the third quarter and with BoJ policymakers set to meet next week, all eyes are on whether they make a move to counter the downturn.
“Dollar-yen will probably remain firm until next week's BoJ meeting,” Akira Moroga, manager of currency products at Aozora Bank, told Bloomberg News.
“But if there is no easing after all, it will be difficult to justify trading any higher from here.”
In Tokyo, the greenback rose to 120.01 yen from 119.84 yen in New York and 119.44 yen in Tokyo earlier on Tuesday, while the euro picked up to 136.31 yen from 135.97 yen in US trading.
The common currency also rose to $1.1363 against $1.1346 after the European Central Bank reported Tuesday that eurozone banks were improving lending conditions for businesses, thanks to its stimulus programme. The ECB holds a closely watched policy meeting this week.
Meanwhile, the dollar picked up against some emerging currencies for the second day as the Japanese data aggravated investor jitters over China's economy and a slump in global growth.
Renewed fears about the global economy have pushed investors into lower-yielding and less risky currencies, including the US unit, as markets await news of a long-anticipated Federal Reserve interest rate hike.
Among the emerging market decliners, the Malaysian ringgit lost 0.74 percent against the dollar and the Indonesian rupiah was down 0.22 percent, while the South Korean won, the Taiwan dollar, the Singapore dollar and the Indian rupee also declined against the US unit.
The Thai baht was flat against the dollar.
AFP