USD Update from MarketWatch. This is from TOS live news feed so I dont have a link to go with it. I've highlighted some key points.
By Deborah Levine and William L. Watts , MarketWatch
NEW YORK (MarketWatch) -- The dollar rose to its highest level against the Japanese yen since December on Tuesday after the Bank of Japan surprised the market by expanding its asset-purchase program.
The dollar advanced against the Japanese yen, trading at ¥78.13 -- touching its highest level on a closing basis since late December -- and up from ¥77.60 in late trading Monday.
The euro jumped 0.7% against the Japan's currency to buy ¥102.85.
The ICE dollar index (DXY) rose to 79.213 from 78.963 in late North American trading on Monday.
The Bank of Japan also set a temporary inflation target and keeping its interest-rate range unchanged at a 0-0.1% range.
The central bank said the ¥10 trillion increase in the asset purchases -- raising the total to "about ¥65 trillion" -- would be earmarked for the purchase of Japanese government bonds.
"This is a significant amount of additional easing, and with the BOJ's preferred measure of core inflation currently running at only -0.1% year-on-year, investors are bound to expect further bouts of monetary accommodation down the road," said Chris Walker , currency strategist at UBS.
The Bank of Japan has come under pressure in its own country to do more to arrest deflation, said Marc Chandler , global head of currency strategy at Brown Brothers Harriman .
It's new inflation goal is still a bit ambiguous, he said, and Japan's consumer price index has not risen by 1% in any year since 1997.
Europe's downgrades
Meanwhile, the euro slipped modestly, turning back down after a number of European ratings were downgraded.
The euro traded at $1.3169 , down from late Monday's $1.3201 .
European equities erased early losses and the euro was buoyed after the February ZEW index of German investor expectations unexpectedly turned positive.
Well-received auctions of Spanish and Italian debt also helped sentiment in the wake of downgrades of both countries' credit ratings late Monday by Moody's Investors Service , analysts said.
"Although the ZEW survey is far less important than the upcoming [ German Ifo index of business sentiment], it nevertheless points to improving sentiment in [the euro] core and suggests that the EUR/USD may extend a bit further if economic data this week proves supportive," said Boris Schlossberg , director of currency research at GFT.
The euro must clear the 100-day moving average at around $1.3320 "with conviction" to have any chance of testing the $1.3400-to-$1.3500 area over the next several weeks, he said.
Moody's late Monday lowered its rating on Italy , Portugal , Slovakia , Slovenia and Malta by one notch, cut Spain's sovereign rating by two notches, and cut the outlook for France , the U.K. and Austria to negative.
The changes were made due to the susceptibility of the countries to "the growing financial and macroeconomic risks emanating from the euro-area crisis and how these risks exacerbate the affected countries' own specific challenges," Moody's said.
Trader's remained pinned ahead of a meeting Wednesday of euro-zone finance ministers to discuss approval for fresh bailout funds for Greece .
The Financial Times reported that Germany and other European nations may not be prepared to fully approve 130 billion euros ( $172.1 billion ) in fresh bailout funds for Greece at the meeting and may require another assessment of the plan at another meeting next week.
Among other major currencies, the British pound fell to $1.5709 from $1.5776 on Monday.
The Australian dollar declined to $1.0702 from $1.0743 Monday.
- Deborah Levine ; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
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