(Bloomberg) — The yen held declines against major peers as the Bank of Japan maintained unprecedented monetary stimulus.
Japan's currency remained weaker versus the dollar after a report indicated the Greek government may ask for a loan extension as soon as Wednesday, damping haven demand. BOJ Governor Haruhiko Kuroda will hold a news conference at 3:30 p.m. in Tokyo after the central bank stuck with its plan to boost the monetary base at an annual pace of 80 trillion yen ($ 672 billion). Japanese government officials a day earlier emphasized the benefits of a weak yen.
"The BOJ will still be pressured to ease," said Derek Mumford, director at Rochford Capital, a currency risk-management company in Sydney. "One of the core elements of the policy is to keep the yen weak; if there are any signs of strength coming in the yen, they will have to ease once more."
The yen traded at 119.03 per dollar as of 1:41 p.m. in Tokyo from Tuesday, when it fell 0.7 percent to 119.25. Japan's currency advanced 0.2 percent to 135.75 per euro, following a 1.1 percent tumble the day before. The common currency was at $ 1.1403 after a 0.5 percent gain to $ 1.1411.
The BOJ's decision was forecast by all 35 economists surveyed by Bloomberg News. Still, 26 analysts in the poll said the central bank will ease policy by October.
Japan's economy expanded less than economists estimated in the fourth quarter, growing at an annualized 2.2 percent, compared with a median forecast in a Bloomberg survey for a 3.7 percent increase.
Kuroda's Stance
"The yen will be sold against the dollar if Kuroda maintains his stance on policy," Takeru Kurokawa, an analyst in Tokyo at Ueda Harlow Ltd., which provides margin-trading services, wrote in a note to clients before the BOJ decision. "If he doesn't touch on the currency's level or easing, there's a possibility of panic dollar selling, yen buying similar to what happened last week."
The yen gained as much as 1.6 percent against the greenback on Feb. 12 after Bloomberg News reported that BOJ policy makers deem further easing counterproductive.
Japan's Finance Minister Taro Aso said Tuesday that a weak yen is good for exporters' profits, and that could be transmitted to higher wages. Economy Minister Akira Amari said the same day that the positive effects of a weak yen on the nation's economy are currently bigger than the negatives.
Greek Talks
Speculation that Greece and its creditors will move closer to an agreement fueled demand for riskier assets, weakening the yen, said Yuji Kameoka, chief foreign-exchange strategist in Tokyo at Daiwa Securities Co.
"If we get word of concrete headway being made in the negotiations, it's very possible the yen will weaken beyond 120 per dollar," he said.
Greece may request a six-month loan extension, a step that could ease a standoff with creditors, said a person familiar with the matter who spoke to reporters in Brussels and asked not to be identified because the deliberations are private.
Talks in the Belgian capital ended abruptly Monday as Greek Finance Minister Yanis Varoufakis said European Commission President Jean-Claude Juncker's panel offered a path forward that finance ministers then refused to put on the table.
Instead, Dutch Finance Minister Jeroen Dijsselbloem offered a different draft statement tying Greece to its current agreement. Varoufakis rejected that proposal out of hand.
To contact the reporters on this story: Kevin Buckland in Tokyo at kbuckland1@bloomberg.net; Netty Ismail in Singapore at nismail3@bloomberg.net
To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net Naoto Hosoda
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