Dollar below ¥80 ahead of BoJ meeting

2012-10-29 09:15

Tokyo - The dollar traded below ¥80 in Asia on Monday ahead of a meeting of the Bank of Japan, despite expectations that the bank will usher in further easing measures.

The greenback, which shot past ¥80.30 on Friday on expectations of BoJ action, changed hands at ¥79.74 in Tokyo afternoon trade, against ¥79.62 in New York late on Friday.

The euro was mixed, weakening to $1.2928 from $1.2942 in US trade while staying flat at ¥103.00.

The BoJ is widely expected to take further easing steps at a one-day policy meeting on Tuesday as it looks to counter slowing in the world's third-largest economy and tackle the deflation that has plagued Japan for years.

The dollar has been gaining strength on easing speculation and upbeat US economic data.

The US economy grew a slightly better-than-expected 2% at an annualised rate in the July-September quarter, picking up from 1.3% in the second quarter, the Commerce Department reported last week.

"Economic fundamentals still support a further rise in the dollar," a senior dealer at a major bank in Tokyo told Dow Jones Newswires.

The euro weakened after official data showed Friday that Spain's jobless rate broke the 25% barrier for the first time in modern history as austerity cuts squeezed the recession-struck economy.

Eurozone ministers, meanwhile, are to hold a series of potentially critical meetings on Greece this week to decide whether Athens has done enough to fix its debt problem to receive the latest tranche of a crucial aid package.

The ministers are also looking at a Greek request for the terms of its bailout to be extended by two years to 2016, allowing it to spread out the pain of the tough austerity measures it has agreed to in return for help.

The dollar was mixed against other Asia-Pacific currencies.

It eased to 1,096.15 South Korean won from 1,097.44 won on Friday, to 41.25 Philippine pesos from 41.31 pesos, to 30.70 Thai baht from 30.72 baht, to Sg$1.2209 from Sg$1.2218, and to Tw$29.25 from Tw$29.52.

The greenback firmed to 53.84 Indian rupees from 53.55 rupees, and to 9,630 Indonesian rupiah from 9,605 rupiah.

The Australian dollar rose to $1.0361 from $1.0318 while China's yuan was at ¥12.76 against ¥12.79 yen.