Yen rises after Bank of Japan's special easing disappoints

By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) -- Japan's yen erased its early losses against major rivals Monday, after an emergency easing by the Bank of Japan failed to stem the currency's strength for long.
The dollar /quotes/comstock/21o!x:susdjpy (USDYEN 84.6500, -0.6900, -0.8087%) slipped to ¥84.94 from ¥85.39 yen in late North American trading on Friday, after rising as high as ¥85.88 after the special meeting was announced. The yen hit a 15-year high versus the dollar last week.
The euro /quotes/comstock/21o!x:seurjpy (EURYEN 107.5300, -1.3700, -1.2578%) also slipped against the yen, buying ¥108.06, down from ¥108.75 late Friday and from a Monday high of ¥109.55.
As many expected, the BOJ said it would expand its current ¥20 trillion quantitative-easing program to six months from its current three-month time frame. It also increased the amount of funds available by ¥10 trillion. Read Asia Markets for more on BOJ.
"The market is clearly viewing these policy moves as actions that are too little too late as the BOJ continues to fight rear-guard action against yen appreciation," said Boris Schlossberg, director of currency research at GFT.
"In fact, instead of steadying the decline in USD/JPY, today's announcement may have only hastened its fall, as speculators may now continue to sell the pair with impunity in the face of these effete policy moves by the Japanese authorities," he said in a note to clients Monday.
Against the dollar, the euro /quotes/comstock/21o!x:seurusd (EURUSD 1.2701, -0.0062, -0.4858%) was buying $1.2729, down from $1.2740 Friday, and the British pound /quotes/comstock/21o!x:sgbpusd (GBPUSD 1.5549, +0.0015, +0.0966%) turned higher to $1.5564, up from $1.5520.
The dollar index /quotes/comstock/11j!i:dxy0 (DXY 82.91, -0.01, -0.01%) , a measure of the U.S. unit against a basket of currencies, traded at 82.781, down from 82.887.
On Friday, the dollar gained on the yen but turned lower against the euro on Friday, in erratic trading after Federal Reserve Chairman Ben Bernanke said the central bank has set no trigger for further monetary-policy easing and sees continued economic growth in the U.S. See Friday's Currencies report.


Source: http://www.marketwatch.com/story/yen-rises-after-bojs-special-easing-disappoints-2010-08-30?siteid=yhoof