NEW YORK - The yen dipped against the dollar and the euro Monday after Japan’s incoming prime minister Shinzo Abe renewed calls on the central bank to take further steps to ease monetary policy.
At about 1900 GMT in quiet Christmas Eve trade, the dollar stood at 84.83 yen, compared to 84.25 yen late Friday. The common European currency reached 111.87 yen, up from 110.05 yen Friday.
Abe has also warned he would change the law to make sure it followed his instructions.
“The potential for continued and increasing government pressure on the Bank of Japan is unambiguously negative for the yen and should keep its longer-term weakening trend intact,” wrote Omer Esiner of Commonwealth Foreign Exchange, Inc. in an analysis.
The euro inched slightly higher against the dollar to stand at $1.3183 around 1900 GMT, compared to $1.3181 around 2200 GMT Friday.
But “the single currency remains vulnerable to further signs of breakdown in America’s fiscal cliff talks,” Esiner said, referencing a stalemate in talks to keep the United States from falling off the so-called fiscal cliff – a mix of tax hikes and spending cuts set to take effect on January 1.
Experts say going over the “cliff” could take the world’s biggest economy back into recession. According to Esiner, the dollar could benefit from further signs of breakdown in the talks as investors lose their appetite for risk.
In other currencies, the dollar slipped to 0.9154 Swiss francs, while the pound fell to $1.6123.