Yen Plays Catch-Up for Asia With Target 75 to Dollar

Japan Prime Minister Naoto Kan says he is ready to take “bold” action as the yen approaches its postwar high against the dollar. Traders say new records are inevitable even after this year’s 9.8 percent gain.

Japan’s currency needs to rise 46 percent to equal its strength in the mid-1990s based on the Westpac Real Effective Exchange Rate Trade Weighted yen index, which accounts for an inflation rate that’s been mostly negative since 1998. Deutsche Bank AG, the world’s biggest foreign-exchange trader, estimates on that same basis the yen would have to gain to 55 per dollar from 85.22 last week to match the record 79.75 in April 1995. The Bank of Japan expanded a bank-loan program today as pressure mounted on it to fight deflation and weaken the yen.