The yen bounced back to 105.88 yen per dollar from 107.49 Friday hovering above six-week lows after comments from Bank of Japan Governor Haruhiko Kuroda hinted that Japan may not be preparing a radical "helicopter money" economic stimulus as anticipated. Helicopter money is essentially a policy of injecting cash directly to the economy in some form by printing money.
Kuroda's made his comments on a BBC Radio 4 interview on Thursday after speculation ran rampant that the BOJ could be financing the additional spending following Prime Minister Shinzo Abe announcement that he was crafting a massive spending package worth about $190 billion to bolster the economy.
Expectations that the BOJ will adopt easing steps at its policy meeting on Friday next week remained strong.
According to Koichi Takamatsu, head of forex at Nomura Securities, "… comments have not dispelled expectations of easing. I suspect a rough consensus in the market is increase in buying of ETFs and REITs as well as 0.10 percentage point cut in interest rates."
Most market players are skeptical of Kuroda's intentions after he introduced negative interest rates in January only days after he said publicly that he was not considering such measures. There are, however, some analysts that do believe that the BOJ may opt to ease later on.
Dollar Steady
The dollar was steadier against other major currencies, with investors still trying to figure out how Britain's decision to leave the European Union will affect the U.S. economy and the policy of the U.S. Federal Reserve.
The euro moved slightly against the dollar after the ECB held off on any immediate further easing of monetary policy on Thursday as expected, trading at $1.1028, slightly above this week's low of $1.0980 but little changed from late U.S. levels on Thursday and is also almost flat on the week.