The yen lost ground in Asian trade ON Tuesday as the Bank of Japan chief vowed to press ahead with “aggressive” monetary easing to combat the deflation that has haunted the country’s economy for years.
The dollar was changing hands at 89.56 yen in Tokyo from 89.45 yen in New York Monday afternoon, while the euro also gained on the Japanese currency at 119.93 yen from 119.65 yen.
The euro was stronger at US$1.3391 from US$1.3376 in US trading.
Tokyo’s benchmark Nikkei index hit a 32-month high in Tuesday morning trade as the yen continued its decline.
The falling yen is good news for exporters which are hurt by a strong currency as it makes their products less competitive overseas and erodes the value of repatriated foreign income.
Bank of Japan (BoJ) governor Masaaki Shirakawa said Tuesday that Japan faced the challenge of ending deflation as part of a bid to return to healthy growth in the world’s third-largest economy.
“The BoJ will pursue aggressive easing in a continuous manner through a combination of virtually zero interest rates and a steady increase in its asset purchase programme,” Shirakawa told the BoJ’s quarterly regional executives’ meeting, referring to the bank’s key policy tool.