Yen’s Decline to Slow After Breaching 110, Mitsubishi UFJ Says

The yen’s slide that pushed it beyond 110 per dollar today for the first time since 2008 is set to slow, according to Mitsubishi UFJ Morgan Stanley Securities Co.

The Japanese currency’s 14-day relative-strength index slipped to 17, below the threshold of 30 that traders see as signaling its decline has been excessive and it is poised to rally. RSI has been below that level every day since the end of August. Excessive currency movements are undesirable, Economy and Fiscal Policy Minister Akira Amari was quoted by the Nikkei newspaper as saying.

“The yen has fallen about 6 yen in September alone and should it sustain the current pace of depreciation, it would break 145 by the end of March, which would be absurd,” said Daisaku Ueno, chief currency strategist at Mitsubishi UFJ Morgan Stanley in Tokyo. “There are signs of speeding.”

The yen declined 0.2 percent to 109.85 per dollar as of 3:06 p.m. in Tokyo after depreciating to 110.09, the weakest since Aug. 25, 2008. The currency slumped 5.1 percent in September, the most since January 2013.

Japan reported a trade deficit of 949.7 billion yen ($8.64 billion) in August, a 26th consecutive month of shortfalls, the Ministry of Finance said Sept. 18.

“Yen bears have plenty of reasons to sell the currency at the moment -- the Bank of Japan is continuing its easing program and Japan’s trade balance has turned red,” Ueno said. “The dollar is likely to find bidders on dips below 110.”

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