April 26, 2012
Investors sold the dollar in European trading after the U.S. Federal Reserve said overnight that it remains ready to ease monetary policy if needed, while the Japanese yen gained ahead of a Bank of Japan policy meeting.
Dollar, Euro Retreat vs. Yen
The U.S. dollar and euro fell against the Japanese yen, a day before the Bank of Japan is expected to expand its asset-buying purchase program.
The Bank of Japan meets on Friday and is expected to increase monetary stimulus for the second time this year, said Kathy Lien, director of currency research at GFT.
Asset purchases may be increased by ¥5 trillion to ¥10 trillion ($61.47 billion to $122.94 billion), with the greater amount being more bearish for the yen, analysts said.
"Based on the price action of dollar-yen this morning, it appears that investors expect a more modest increase," Ms. Lien said.
However, over the longer term, Japan's efforts to weaken its own currency haven't worked, in large part because of dynamics elsewhere in the world—like the debt crisis in Europe and the Federal Reserve's overwhelming bond purchases
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