Tokyo :The dollar detained its position against the yen on Tuesday after slid in New York, although forecasters anticipate further progress for the greenback as economic policy in Japan and the United States deviated.
The dollar bought 120.79 yen in Tokyo on Tuesday, compared to 120.78 in US trade on Monday.
The euro was at $1.2305 and 148.72 yen against $1.2308 and 148.65 yen.
Investor demand for the greenback has ramped up since the BoJ widened its monetary base in October in a bid to kickstart, at the same time as the US central bank looks to tighten policy with a rate rise in response to a strong economic recovery.
Friday saw the dollar climb above 121 yen for the first time in more than seven years after the Labour Department said US jobs growth picked up more than expected in November.
But while the greenback took a breather in New York on Monday, experts expected it to continue appreciating against the yen through 2015.
“The possibility has increased that we will at some stage experience a (dollar/yen) level beyond 124.14,” said Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley, referring to the 2007 high, before the global economic crisis.
The dollar is showing signs of overheating – sitting about 15 percent above its 52-day moving average, a reference point used to determine a currency pair’s direction.
Toshiyuki Umekawa, senior vice-president of Mizuho Bank, also said some traders might adjust their positions while there are few catalysts to drive business.
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