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Yen plummets after fresh BoJ monetary easing

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(Globalpost/GlobalPost)

The yen plunged in Asian trade Thursday after the Bank of Japan unveiled a fresh raft of monetary easing measures, while its new leader promised to do what was needed to revive the stuttering economy.

The dollar soared to 95.46 yen in late Tokyo trade after languishing around 92.87 yen shortly before the BoJ decision was announced. while the euro jumped to 122.17 yen from 119.34 yen earlier in Tokyo.

At the end of the first meeting under Haruhiko Kuroda, the BoJ said it would boost asset purchases, including of government bonds, and increase the supply of money in circulation.

In a news conference afterwards Kuroda said he would not hesitate to take "other necessary steps" to boost the economy, adding that the BoJ was "resolved to take whatever measures we can think of" to hit a two percent inflation target aimed at reversing decades of falling prices.

Chris Tedder, research analyst at Forex.com in Sydney, said the announcement had "exceeded market expectations", sending the yen tumbling.

"Kuroda has sent a message to the market that he is serious about doing whatever it takes to reach the bank's two-percent inflation target," he added.

Last month, Kuroda replaced Masaaki Shirakawa, who had sparred with Prime Minister Shinzo Abe over policy measures since the politician took office in December demanding aggressive central bank monetary easing to beat deflation.

Speculation over the outcome of Thursday's meeting had been building, with analysts warning the new-look BoJ may have set an unrealistically high bar and that any new measures Thursday may disappoint markets.

Forex traders were also watching Bank of England and European Central Bank policy meetings this week amid jitters over bailed-out Cyprus and political instability in Italy.

In Tokyo trade, the euro bought $1.2791 from $1.2845 in New York on Wednesday

The dollar was mostly higher against other Asia-Pacific currencies Thursday, firming to 1,123.65 South Korean won from 1,118.73 won a day earlier, to 54.61 Indian rupees from 54.36 rupees and to 41.06 Philippine pesos from 40.91 pesos.

It also advanced to Sg$1.2396 from Sg$1.2393, and to 9,760 Indonesian rupiah from 9,742 rupiah.

The greenback weakened to 29.35 Thai baht from 29.41 baht, while it was flat at Tw$29.88.

The Australian dollar fell to $1.0443 from $1.0451, while the Chinese yuan fetched 15.26 yen against 15.05 yen.

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http://www.globalpost.com/dispatch/news/afp/130404/yen-plummets-after-fresh-boj-monetary-easing