Dollar retreats to ¥106.10 on BOJ denial of ‘helicopter money’

The dollar fell back to levels a tad above ¥106 in Tokyo trading on Friday, after Bank of Japan Governor Haruhiko Kuroda reiterated that the BOJ will not use “helicopter money” as a monetary stimulus.

At 5 p.m., the dollar stood at ¥106.10-10, down from ¥106.82-83 at the same time Thursday. The euro was at $1.1025-1025, slightly down from $1.1032-1032, and at ¥116.98-99, down from ¥117.85-85.

The greenback drifted mostly in a range between ¥105.50 and ¥105.80, before topping ¥106 in late afternoon trading.

In overseas trading overnight, the U.S. currency slid close to ¥105.40 at one point following the remarks by Kuroda in a BBC radio interview.

Kuroda’s repeated denial of the use of helicopter money “triggered position-adjustment selling by players who were buying the dollar against the yen lately,” an official at a major Japanese bank said.

The dollar’s topside vis-a-vis the yen was also capped by pullbacks in Japanese and overseas shares, traders said.

Meanwhile, its downside was underpinned by hopes for a further monetary easing decision by the BOJ at a Policy Board meeting for two days from Thursday, they said.

Overall, a wait-and-see mood was strong ahead of the BOJ policy review and other key events, including a weekend meeting of top financial officials of the Group of 20 major and emerging economies in Shanghai and a two-day policy-setting meeting of the U.S. Federal Reserve from Tuesday.

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