The dollar was higher against the yen in otherwise quiet Asia trade Tuesday, with the greenback holding on to some of its gains after Bank of Japan Gov. Haruhiko Kuroda clarified controversial remarks he made last week about the Japanese currency.
What upset the market last Wednesday was Kuroda’s comment during a parliamentary session that a measure of the yen’s relative value against other currencies was unlikely to weaken further. The remarks caused the dollar to fall roughly ¥2 from around ¥124.60 in a matter of few hours.
“In making those comments I was neither trying to assess the nominal exchange rate (of the yen) nor forecast its future movement,” Kuroda said Tuesday during a session of the upper house financial affairs committee.
Following his remark, the greenback USDJPY, +0.09% jumped as high as ¥123.81 before weakening to ¥123.56 . That compares with ¥123.37 late Monday in New York.
“His comments (today) gave the impression that what he said just slipped out last time,” a senior Japanese bank dealer said. “Revising earlier comments this way will result in denial of his earlier comments,” said the bank dealer.
The dealer said that the comment came in otherwise quiet market mood in which investors “became fed up with Greece-related headlines and just waiting for what will come out” from the Federal Open Market Committee meeting scheduled to wrap up Wednesday, said the dealer.
The dollar is showing itself resilient in what may underscore the currency market’s prognosis that a U.S. rate increase is coming closer, said Takuya Kanda, senior researcher at Gaitame.Com Research Institute in a note.
Despite headwinds from U.S. and eurozone stock weakness on Greek debt worries, the dollar managed to stay above the ¥123-mark overnight, showing “there’s a small room (for the dollar) to go lower,” adding that the greenback may remain firm centered around the ¥123-level ahead of the FOMC statement.
Amid concerns over the future status of Greece, the euro EURUSD, -0.2393% was at $1.1280 from $1.1284, while the single currency EURJPY, -0.14% was at ¥139.38 from ¥139.23.
European Central Bank President Mario Draghi raised pressure on the Greek government Monday to come to an agreement with its international creditors to unlock financing. “While all actors will now need to go the extra mile, the ball lies squarely in the camp of the Greek government to take the necessary steps, “ Draghi said.
The WSJ Dollar Index BUXX, +0.16% , a measure of the dollar against a basket of major currencies, was up 0.05% at 86.26.