The U.S. dollar briefly plunged to the upper 138 yen level early Friday in Tokyo on speculation that the Bank of Japan could tweak its ultraeasy monetary policy at its meeting ending later in the day.
The yield on the benchmark 10-year Japanese government bond hit 0.505 percent, exceeding the upper limit of 0.500 percent set by the central bank, after a news report that the BOJ will discuss a change in its policy to allow long-term interest rates to rise above its cap by a certain degree.
The dollar fell by around 2 yen following the news report. At 9 a.m., the U.S. currency fetched 138.88-91 yen compared with 139.45-55 yen in New York and 139.98-140.00 yen in Tokyo at 5 p.m. Thursday.
The euro was quoted at $1.0978-0979 and 152.43-52 yen against $1.0971-0981 and 153.08-18 yen in New York, and $1.1128-1130 and 155.77-81 yen in Tokyo late Thursday afternoon.
Tokyo stocks opened lower after the speculation about the BOJ's policy change lifted the yen sharply.
In the first 15 minutes of trading, the 225-issue Nikkei Stock Average fell 428.81 points, or 1.30 percent, from Thursday to 32,462.35. The broader Topix index was down 22.49 points, or 0.98 percent, at 2,272.65.
Decliners included electric power and gas, real estate and service shares.
