TOKYO,(Pakistan Point News - 22nd july,2016) - The yen edged lower Friday after a rally in New York sparked by Japan's central bank chief dashing hopes for so-called 'helicopter money' stimulus. The Japanese unit soared Thursday after the BBC aired a month-old interview with Bank of Japan governor Haruhiko Kuroda in which he said there was "no need and no possibility" for such a package to boost the economy. The strategy of helicopter money sees the bank funnel cash directly into the economy, such as by putting cash straight into people's bank accounts, rather than the more traditional bond-buying method.
The dollar dropped from levels above 107 yen to around 105.76 yen but on Friday it edged up to 105.87 yen. Kuroda's "comments will disappoint investors who had been selling the yen in anticipation of the Bank of Japan announcing helicopter money at its meeting next week", Jasper Lawler, a London-based analyst at CMC Markets, told Bloomberg News. "After the failure of its current ... easing programme to boost inflation, helicopter money is one of the few remaining tools in the Bank of Japan's arsenal.
" Markets are waiting for a wave of stimulus after leaders promised measures to kickstart their economies in the wake of Britain's shock EU exit vote last month. But those hopes took another hit as the European Central Bank held off any fresh easing measures Thursday and its own boss provided limited scope for support in the future. The euro edged up to $1.1028 and 116.74 yen in Tokyo from $1.1024 and 116.60 yen in New York late Thursday. There's "some fatigue in terms of what central banks can do to control currencies at this point and yes, in terms of what else the ECB may bring to the table", Chris Chapman, a London-based trader at Manulife Asset Management, told Bloomberg News.