Japanese Yen Drops to Lowest Since 2010 on Stimulus Bets

The Japanese yen touched the lowest level in more than two years before Bank of Japan Governor Masaaki Shirakawa speaks tomorrow amid speculation the central bank will boost monetary stimulus. Australian stocks rose.

The yen dropped to as low as 89.67 per dollar, a level last seen since June 25, 2010. Commonwealth Bank of Australia, the nation’s biggest lender, added 0.8 percent before the release of home-lending data today. Gold producer Northern Star Resources Ltd. jumped 4.7 percent in Sydney after reporting increased production at its Paulsens mine in the three months ended December.

The yen posted its longest weekly slump since 1989 last week as Prime Minister Shinzo Abe announced a 10.3 trillion yen ($116 billion) stimulus package to help accelerate a recovery from a recession.

“Abe announced fiscal stimulus in Japan, which is what sent the yen lower against the dollar,” Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York, said in a telephone interview. “We were expecting some sort of fiscal program, and they basically put some flesh on the bone.”

Australia’s S&P/ASX 200 Index (AS51) gained 0.3 percent to 4,724 at 10:56 a.m. in Sydney, while New Zealand’s NZX 50 Index added 0.2 percent. Japanese equity markets are closed today for a holiday. The benchmark Nikkei 225 Stock Average climbed to its highest level in almost two years last week

The MSCI Asia Pacific Index fell for the first time in eight weeks last week as China’s inflation accelerated. The gauge traded at 14.2 times estimated earnings, compared with 13.3 times for the Standard & Poor’s 500 Index and a multiple of 12 for the Stoxx Europe 600 Index, according to data compiled by

Futures on the S&P 500 Index were little changed today. The benchmark index for U.S. equities, which climbed to a five-year high last week, closed almost unchanged on Jan. 11 as banks slumped and China’s inflation accelerated.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. slipped 1.1 percent to 101.34 on Jan. 11 in New York.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Masaki Kondo in Singapore at mkondo3@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.