Dollar selling takes respite with all eyes on BOJ

TOKYO: Dollar selling took a pause in Asian trading Friday but the market lacked clear direction ahead of the Bank of Japan's closely watched policy announcement later in the day.
The dollar was slightly higher at 81.68 yen in Tokyo morning trading, compared with 81.60 yen in New York late Thursday.

The euro fetched $1.4305, little changed from $1.4308. The single European currency rose to 116.85 yen from 116.78 yen.
The dollar came under pressure overnight following sluggish economic data that showed the nation's economic recovery remains weak.

Traders were given little reason to support the greenback by indicators that showed sluggish US industrial activity, still-depressed homes sales, and continuing high new jobless claims.

"The dollar was sold overnight after data for reading the course of the US economy came in far weaker than the market had expected," said Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ.

"But the dollar was supported in the morning on speculation about real
demand-backed yen selling from Japanese importers," Kamei said.

The market is keeping close tabs on the Bank of Japan's monetary policy meeting due to end later in the day.

The central bank is expected to keep its policy target range between zero and 0.1 percent and introduce no other unconventional easing measures, according to a poll of 10 economists by Dow Jones Newswires.

"Despite weak GDP figures, the BOJ is likely to keep its monetary policy on hold as the central bank is still monitoring the effects of additional easing measures implemented after the March 11 quake," Kamei said.

Official data released Thursday showed Japan's economy plunged back into recession in January-March, contracting by a worse-than-expected annualised 3.7 percent in the first three months of the year. (AFP)