Dollar Steady vs Yen; May Fall on Expectation BOJ May Lift Rate
Bloomberg News
Wed, 28 Jun 2000, 9:17pm EDT
Dollar Steady vs Yen; May Fall on Expectation BOJ May Lift Rate
By Miki Anzai and Mari Murayama
Tokyo, June 29 (Bloomberg) -- The dollar, little changed against the yen for a third day, may fall on speculation the Bank of Japan will raise interest rates as soon as next month.
The probability that the BOJ will end its zero-interest rate policy next month increased after the economy for the year ended March expanded for the first time in three years and as concern about deflation in the economy faded, Asahi newspaper reported, without citing sources.
``Speculation over the termination of the zero-rate policy will weigh on the dollar,'' said Ryuichi Takami, vice president for foreign exchange at Sanwa Bank Ltd.
One dollar bought 105.39 yen, down from 105.57 in late New York trading yesterday. The euro rose to 94.32 U.S. cents from 94.01 in New York.
Traders and investors said they will hold off on big currency bets until they see more evidence the Bank of Japan is considering raising rates.
Tomorrow Japan will release reports on jobs, household spending and construction orders for May, and on Tuesday the Bank of Japan will releases its quarterly Tankan survey of business confidence. The widely watched survey is expected to shed light on the timing of a possible BOJ rate increase, Takami said. He expects the dollar to trade between 105 yen and 105.80 yen today.
The BOJ policy board left its target for the interbank overnight loan rate near zero yesterday. The board will meet July 17 and again Aug. 11 and Sept. 14.
The U.S. currency didn't fluctuate much after the Federal Reserve yesterday left its benchmark interest rate unchanged at 6.5 percent. All 29 companies that deal directly with the Fed had predicted no rate increases.
In other trading, the dollar fell to 1.6441 Swiss francs from 1.6486 francs in New York yesterday. The British pound was quoted at $1.5126, down from $1.5130 yesterday.
Best Regards, J.T. |
