Reply #4: Dollar drop as data prod Japan closer to policy action [View All]

[ozymandius]

TOKYO (Reuters) – Weak Japanese economic data and a fall in the dollar to an eight-month low against the yen on Wednesday prodded Tokyo closer to fresh action to support an already fragile economic recovery.

Market speculation that the Bank of Japan (BOJ) will have to relax its already loose monetary policy has increased as policymakers have raised the alarm over a fall in the dollar against the yen, which they fear could hurt exports.

The dollar dropped below 85 yen on Wednesday and while the finance minister said he was watching the market extremely carefully, he declined to comment on the possibility of currency intervention.

If the dollar slips below November's low of 84.82 yen, it would mark the currency's weakest level in 15 years.

http://news.yahoo.com/s/nm/20100811/bs_nm/us_japan_economy