Dollar tops ¥130 for 1st time since April 2002

TOKYO (Jiji Press) — The dollar shot up above ¥130 for the first time since April 2002 in afternoon trading in Tokyo on Thursday, after the Bank of Japan earlier in the day announced a decision to keep its ultraeasy monetary policy unchanged.

The greenback is up sharply from ¥127.98-99 at 5 p.m. Wednesday.

At its two-day policy-setting meeting through Thursday, the BOJ decided its policy unchanged and said that it will conduct money market operations to buy unlimited amounts of 10-year Japanese government bonds at a fixed rate of 0.25% every business day “unless it is highly likely that no bids will be submitted.”

Following the BOJ announcement, dollar purchases gained steam on growing expectations for wider interest rate gaps between the United States and Japan. Japan’s central bank demonstrated its resolve to curb long-term interest rates in the country, market sources said.

The dollar’s surge came also because Japanese importers rushed to buy the U.S. currency for yen ahead of Japan’s Golden Week holiday period from Friday, the sources added.

Before the BOJ’s policy announcement, the dollar was trading around ¥128.60.