April 30, 2014 7:05 pm JST

Dollar dips to mid-102 yen on BOJ's confidence about inflation target

TOKYO (Kyodo) -- The U.S. dollar dropped slightly to the mid-102 yen zone Wednesday in Tokyo after the Bank of Japan expressed confidence about achieving its inflation target in its outlook report.

     At 5 p.m., the dollar fetched 102.50-52 yen compared with 102.59-69 yen in New York at 5 p.m. Tuesday. It moved between 102.28 yen and 102.65 yen during the day, changing hands most frequently at 102.58 yen.

     The euro was quoted at $1.3806-3807 and 141.52-56 yen against $1.3807-3817 and 141.69-79 yen in New York late Wednesday afternoon.

     Tokyo's financial markets were closed Tuesday for a national holiday.

     The dollar recovered to the level seen in the morning around 102.50 yen, having fallen to the lower 102 yen immediately after the central bank released its semiannual outlook report, said Shinichiro Kadota, foreign exchange strategist at Barclays Bank.

     The BOJ projected in the report that the country's consumer prices will likely rise around 2 percent in fiscal 2015 and fiscal 2016, maintaining its goal to achieve 2 percent inflation in about two years.

     The report diminished expectations for further monetary easing by the central bank, prompting yen-buying, dealers said.

     However, BOJ Governor Haruhiko Kuroda told a press conference later in the day that the BOJ will make policy adjustments if necessary after inspecting both upside and downside risks, especially overseas factors.

     In morning trading, the U.S. currency weakened somewhat after its rise to the upper 102 yen range in overseas markets the previous day due to easing concern over Ukraine, dealers said.

     Players in overseas markets viewed additional sanctions on Russia imposed by the United States and other countries as not so strict, prompting dollar buying in a moderate risk-on mood, said Toru Moritani, chief market economist at Sumitomo Mitsui Banking Corp.

     Although the U.S. Federal Reserve is scheduled to conclude its two-day policy meeting later in the day, Barclay's Kadota said it is unlikely to provide market-moving incentives, with no fresh decisions expected.

     Market participants' focus is shifting to the U.S. jobs report for April due out on Friday, he added.