The dollar and euro fell against the yen on Tuesday as traders booked profit on recent gains ahead of widely anticipated stimulus action by the Bank of Japan.

The greenback fell to ¥87.08 from ¥87.82 the previous session after settling above ¥88 earlier in the week.

The dollar has risen sharply against the yen in the last month on expectations that Japan new government will put pressure on the Bank of Japan to take more aggressive monetary stimulus measures.

Japanese Finance Minister Taro Aso recently stressed the need for further monetary and fiscal stimulus to revive the economy.

New Prime Minister Shinzo Abe has called on the BOJ to share a 2% inflation target with the government, double the bank's current price target. The BOJ will review setting a higher inflation target at its next rate review on January 21-22nd.

The euro changed hands at ¥113.97 compared to ¥115.12 the session before while the single currency fell to $1.3084 from $1.3111 in the prior session.

The euro was kept in a tight range ahead of the European Central Bank meeting on Thursday.

The dollar index, which measures the greenback against a basket of six major currencies, advanced to 80.323 from 80.256 in late trading on Monday.

Sterling bought $1.6053 compared to $1.6109 on Monday.


CJ

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