Yen Near 3-Year Low as Treasury Backs Japan Stimulus PlanMariko Ishikawa and Lucy Meakin
The yen rallied from the weakest level since May 2010 against the dollar amid speculation Japan will slow down the introduction of stimulus measures that tend to devalue a currency.
The yen rose against all except one of its 16 major peers as the Group of Seven said in a statement it reaffirmed its commitment to market-based exchange rates. The yen also gained after North Korea conducted a nuclear test. Japan’s currency has tumbled over the past three months as Prime Minister Shinzo Abe has pressured the central bank to step up efforts to spur growth. The euro fell as economists said a report this week will show the region’s economy shrank last quarter.
“You’ve got some quite volatile moves in the yen,” said Neil Jones, the head of European hedge-fund sales at Mizuho Corporate Bank Ltd. in London. “In the short term, price action is very much subject to, ‘Is the currency war on or off?’ It seems to be the realms of politics at the moment that seems to be causing the gyrations as opposed to real fundamental economics or long term investment strategy.”
The yen strengthened 0.2 percent to 94.17 per dollar at 10:15 a.m. London time after depreciating to 94.46 yesterday, the weakest since May 5, 2010. Japan’s currency gained 0.3 percent to 126.07 per euro after slumping 2 percent yesterday. The euro declined 0.1 percent to $1.3387.