Dollar dips against yen in Asia
The dollar dipped against the yen in Asian trade on Thursday ahead of a two-day meeting of finance ministers and central bank chiefs of the Group of 20 nations.
The greenback fell to 98.08 yen, compared with 99.19 in New York late Wednesday.
The euro was at 127.96 yen against 127.97 yen in the United States after slipping as low as 126 yen Monday. The euro also fetched US$1.3045 compared with US$1.3033 in New York.
But traders expect the dollar to resume its climb if the Bank of Japan’s (BoJ’s) huge easing programme comes out of the G20 meeting in Washington without attracting too much criticism as a deliberate currency-devaluing move.
Citibank Japan chief forex strategist Osamu Takashima said in a note that the dollar could break through the 100-yen level after the G20 meeting, which starts later Thursday.
“The yen is unlikely to come under fire, although emerging countries may voice their complaints” about a weakening Japanese unit as a result of the BoJ’s radical easing, Takashima said.
Japan’s finance ministry reported earlier Thursday that the country’s trade deficit more than quadrupled to $3.7 billion in March compared with the same month last year as a weaker yen inflated import costs.
The monthly trade deficit grew to 362.4 billion yen from the year-before shortfall of 81.8 billion yen, according to finance ministry data.
However, the heavy deficit was still smaller than a prediction of 480 billion yen from economists polled by the Nikkei business daily.
The yen’s average rate was 94.08 to the dollar in March against 81.04 in March last year, representing a 16 per cent drop in the value of the Japanese currency on year, the data showed.
Japan is heavily reliant on fossil fuel imports to generate electricity and has become more so in the aftermath of the Fukushima disaster, with nearly all of its nuclear reactors out of service.