The yen was under pressure in Asian trading on Tuesday after pro-easing comments from the men nominated to take over as the Bank of Japan’s new leadership.
Japan’s currency has been pushed down by expectations that the BoJ will adopt fresh credit easing measures to boost the world’s third-largest economy when its new leaders take up their posts in the coming weeks.
Haruhiko Kuroda, a finance veteran the government has nominated to head the central bank, told Japan’s parliament Monday that if confirmed as BoJ head, he would do “everything possible” to reverse years of growth-sapping deflation.
On Tuesday, Hiroshi Nakaso, one of Kuroda’s proposed deputies, told lawmakers he was open to new ideas to beat deflation, which he called the BoJ’s “important mission”.
“This is a golden opportunity to achieve our long-time goal — getting out of deflation,” Nakaso said.
Kuroda’s second proposed BoJ deputy, Kikuo Iwata, said the BoJ should take bolder monetary easing steps to meet a new two-percent inflation target.
In late morning forex trade, the greenback was slightly weaker at 93.32 yen against 93.46 yen in New York Monday afternoon.
The dollar was facing pressure as the sequester — $85 billion in mandatory cutbacks to US government spending — came into effect, after lawmakers failed to agree on a less severe approach to reducing the federal deficit.
The cuts were already having an effect as temporary unpaid leave for some government workers saw travellers at US airports greeted with longer lines and delays, Homeland Security Secretary Janet Napolitano said Monday.
The euro was mixed at 121.62 yen and $1.3026 compared with 121.74 yen and $1.3024 in US trade following a meeting of finance ministers from the 17-nation eurozone on Monday.
Public sector job cuts were at the centre of Greece’s bailout review as international auditors assessed the country’s progress in implementing reforms before unlocking another loan to help it out of its debt crisis.
The ministers also said that a long-delayed 17-billion-euro ($22.3 billion) bailout for Cyprus could be fixed by the end of the month.
Forex markets were also keeping a close eye on fresh Chinese economic news with Beijing on Tuesday announcing it has set its 2013 economic growth target at 7.5 percent, unchanged from last year’s. It pegged the nation’s inflation target at 3.5 percent, lower than a 4.0 percent target last year.