– This is the script of CNBC's news report for China's CCTV on July 22, Friday.
Welcome to CNBC Business Daily, I'm Qian Chen.
You might still remember that over weeks ago, Dollar/Yen was hanging around 100, and the market feared the Japanese government would step in soon to intervene the currency market by "helicopter money".
However, Bank of Japan Governor Haruhiko Kuroda said in an interview with BBC that he ruled out the idea of using "helicopter money" - or directly underwriting the budget deficit - to combat deflation, as policymakers in Tokyo gear up to expand existing stimulus programs.
Japanese markets have risen this month on speculation that authorities, battling to revive an economy dogged by decades of anaemic inflation, will resort to using helicopter money, possibly issuing perpetual bonds to underwrite public debt.
But in a BBC interview broadcast on Thursday, Kuroda said the central bank already had mechanisms in place to ease policy further if needed, and that Japan should not forfeit a clear separation between fiscal and monetary institutions.
A majority of economists polled by Reuters this week expected the BOJ to ease policy later this month, forecasting a combination of measures in another attempt to kick-start inflation.
The dollar slipped from a six-week high against the yen on Thursday after Bank of Japan chief Haruhiko Kuroda said the bank saw no need to stimulate the economy with "helicopter money."
After falling by 1 percent against the Japanese currency following the comment in a BBC Radio 4 interview, the dollar pared its losses as the overall theme of dollar strength against other major currencies began to reappear.
Investors had been betting on an aggressive round of stimulus from next week's BOJ meeting. Kuroda played down the idea of injecting cash directly to businesses and consumers, leading to a yen surge as strong as 105.41 yen per dollar.
The dollar had touched a six-week high above 107 yen before Kuroda's interview was broadcast on reports that a fiscal stimulus package from Tokyo might be as much as twice as large as previously suggested.
Analysts said the move lower in the dollar against the yen may have been based more on technical positioning and "steam being let out of the dollar's rally," than expectations that the BOJ is rethinking its bias to ease monetary policy.
CNBC's Qian Chen, reporting from Singapore.