The U.S. dollar rose against Japan's currency Wednesday, extending gains against the yen as investors waited for a decision from the Bank of Japan's first policy meeting under a new governor. The dollar traded at 93.53 Japanese yen , rising from ¥93.38 late in North American trade Tuesday. The Bank of Japan began its two-day monetary-policy meeting Wednesday, the first to be headed by Gov. Haruhiko Kuroda, who's pledged to fight long-running deflation in Japan and meet a 2% inflation target in two years. “More and more economists and ex-Bank of Japan officials are stating the 2% target ‘can't be done'" in that time frame, IG market strategist Evan Lucas wrote in a report. “If the markets look at this realistically and practically, [Kuroda] actually has less time than this," said Lucas. “Markets are forward-looking and reactionary — if they cannot see results inside six to 12 months, market confidence will swing against him, making the target nigh-on-impossible." The Bank of Japan may outline more quantitative easing when it issues its decision Thursday. Kuroda, speaking at a parliamentary session Tuesday, said buying five-year or longer-term government securities is one option for easing monetary policy. Data bolster A$ Meanwhile, the greenback fell against Australia's currency after the nation posted a narrower-than-expected trade deficit for February. The Aussie dollar traded at $1.0468 after the Australian Bureau of Statistics said the trade gap shrank to 178 million Australian dollars ($186 million) on a seasonally adjusted basis, compared with a deficit of A$1.2 billion in January. The Aussie dollar was around $1.0451 before the data were released, having traded hands at $1.0448 in North American trade late Tuesday. The consensus estimate had been for a trade deficit of A$1 billion in February, according to RBC Capital Markets, which also said that jumps in iron ore and coal helped overall exports rise 3.3% in February. While “timelier port data suggested continued supply-chain-related softness in coal and iron-ore exports, at least some of this has been explained away by seasonality and higher traded prices," Sydney-based RBC strategist Michael Turner wrote to clients on Wednesday. According to CMC Markets sales trader William Leys, February's narrower trade deficit “may be viewed as a sign of strength for the economy and perhaps evidence that previous interest-rate cuts are achieving the desired effect," as suggested by Reserve Bank of Australia Gov. Glenn Stevens in his policy statement Tuesday. Australia's central bank on Tuesday held its benchmark interest rate at 3%, with Stevens saying there “are a number of indications that the substantial easing of monetary policy during late 2011 and 2012 is having an expansionary effect on the economy." Recent information suggests moderate growth in private consumption spending, said the central bank, “though a return to the very strong growth of some years ago is unlikely." Stevens on Wednesday won a new three-year term as head of Australia's central bank. Among other major currency pairs, the euro eased slightly to $1.2804 from $1.2812 in North American trade late Tuesday, while the British pound fell to $1.5084, down from $1.5109. Marketwatch
