The dollar/yen continued higher in midafternoon on weakness in the benchmark Nikkei 225 stock index ahead of the announcement of the Bank of Japan's policy board meeting tomorrow, dealers said. "The dollar/yen is rising because of the weakness of Japanese stocks. But there is still concerns over how the US economy will fold out following the FOMC rate cut," said Minori Takeuchi, forex analyst at JP Morgan Chase.
"It depends on the US economic indicators but it might go to 122," she said. Investors are also waiting for the outcome of the BoJ policy meeting, though the bank is unlikely to change monetary conditions further. "The BoJ has just changed its economic policy and so, there is no political pressure to change again," Takeuchi said.
The Nihon Keizai Shimbun cited central bank sources as saying the BoJ will start a debate on how to help meet the financing needs of corporate borrowers at the policy-board meeting. The BoJ will likely adopt measures to allow financial institutions to offer as collateral a wider variety of securities issued by corporate borrowers when the central bank supplies funds to the banks, the newspaper said.//www.ananova.com