Mr. Yen Sees Currency Strengthening as Global Growth FizzlesBy
Eisuke Sakakibara projects range of 115 to 120 per dollar
Former vice minister of finance sees demand for safe assets
The yen will probably appreciate as slowing global economic growth drives investors to seek safe assets, according to Eisuke Sakakibara, who was nicknamed “Mr. Yen” when he served as Japan’s vice minister of finance from 1997 to 1999.
"Given the condition of the world economy, the Japanese yen will probably go into the range of 115 and 120" against the dollar, said Sakakibara, who’s a professor at Aoyama Gakuin University. He didn’t provide a time frame.
"When the world economy is in bad condition, the yen tends to appreciate -- yen is considered to be a safe currency," he said in a speech in New York. Sakakibara’s prediction for a stronger yen contrasts with bearish median forecasts for 123 per dollar by the end of the year and 125 in the first quarter, according to analysts surveyed by Bloomberg.
The yen has fallen 1.2 percent against the dollar this year as the Bank of Japan carried out unprecedented stimulus. It rebounded in August after China’s shock devaluation of the yuan roiled financial markets. It dropped 0.6 percent to 121.19 per dollar Wednesday in New York.
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