Yen gains in Asia after BoJ policy moves

TOKYO: The yen strengthened in Asian trade Wednesday after the Bank of Japan announced an open-ended easing programme and adopted a new inflation target, in line with market expectations.

In early Tokyo deals the greenback bought 88.63 yen, against 88.68 yen in New York late on Tuesday, while the euro fetched 118.03 yen from 118.14 yen.

The single currency eased to $1.3314 from $1.3321.

The BoJ on Tuesday said it would adopt a two percent inflation goal demanded by the country's new government in a bid to beat the deflation that has haunted the economy for years.

It also unveiled an unlimited asset-purchase scheme -- similar to the US Federal Reserve's quantitative easing -- to start next year as part of a plan to achieve that goal.

However, dealers were largely underwhelmed, with some analysts criticising the inflation target's vague timeline and saying 13 trillion yen in monthly asset purchases was unlikely to save the limp economy.

The announcement brought an end to the yen's recent fall against the dollar and euro, which began in November when Shinzo Abe said ahead of a general election he eventually won that he would press for more aggressive BoJ easing.

The bank last month expanded its now 101 trillion yen asset-purchase programme (APP), its third major policy move since September after similar measures from its US and European counterparts.

Abe has since moved to bring BoJ policies into line with his new government's plan for big spending and aggressive monetary policy to stoke growth.

The hawkish premier on Tuesday described the central bank's policies, outlined in a rare joint BoJ-government statement, as "epoch making".

However, London-based Capital Economics said that "calling a policy 'bold' does not necessarily make it so".