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Australia, N.Z. Currencies Fall Versus Yen After Decision by Bank of Japan
The Australian and New Zealand dollars fell against the yen for the first time in four days on speculation the Bank of Japan’s decision to expand its loan program will fail to halt the currency’s appreciation.
The two South Pacific currencies also weakened versus the greenback as the size of the BOJ’s step disappointed some analysts and European and U.S. stocks fluctuated. New Zealand posted a trade deficit in July for the first time in seven months, data showed.
“The BOJ didn’t go beyond the market’s expectations such as buying more government bonds, disappointing investors,” said Takuya Kawabata, a researcher in Tokyo at Gaitame.Com Research Institute Ltd., a unit of Japan’s largest foreign-exchange margin company. “As a result, cross currencies are paring gains against the yen.”
Australia’s dollar dropped 1 percent to 75.87 yen at 11:07 a.m. in New York, from 76.62 yen last week, after earlier rising to 77.52, the strongest since Aug. 18. It headed for a monthly loss of 3 percent. The Aussie fell 0.4 percent to 89.54 U.S. cents, from 89.89 cents.
New Zealand’s dollar fell 0.7 percent to 60.16 yen, from 60.56 yen, and was poised for a monthly decline of 4.2 percent. It declined 0.2 percent to 70.98 U.S. cents, from 71.09 cents.
The BOJ said after an emergency meeting in Tokyo it would boost the amount of funds in its loan facility by 10 trillion yen ($116 billion) to 30 trillion yen, while keeping its benchmark overnight lending rate at 0.1 percent.
The Standard & Poor’s 500 Index dropped 0.3 percent, and the Stoxx Europe 600 Index slipped 0.1 percent.
The New Zealand dollar snapped a two-day gain versus the greenback as the statistics bureau said the nation posted a trade deficit of NZ$186 million ($132 million) in July from a revised NZ$214 million surplus the previous month.
To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Catarina Saraiva in New York at asaraiva5@bloomberg.net
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