Yen Close to Erasing Brexit Rally as Stock Gains Sap Safety Bid

The yen dropped to the lowest level in more than three weeks as gains in global equities sapped demand for haven assets.

Japan’s currency is close to erasing all its advance against the dollar since June 24, when the “Leave” victory in the U.K.’s Brexit referendum emerged. The yen is the worst performer after the New Zealand dollar among the greenback’s major peers over the past week amid speculation Japanese fiscal stimulus will be accompanied by additional monetary easing. The kiwi dropped to a three-week low after the Reserve Bank of New Zealand announced lending limits to curb a housing boom, paving the way for an interest rate cut.

“Dollar-yen should be supported over the next week or so at least, in anticipation of fresh stimulus from the Bank of Japan and fiscal policy,” said Sean Callow, a senior foreign-exchange strategist at Westpac Banking Corp. in Sydney. “An improved risk environment also helps the pair.”

The yen traded was unchanged at 106.16 per dollar at 8:51 a.m. in Tokyo, after touching 106.33 for the first time since June 24, when it was as weak as 106.84. It was little changed at 117.52 per euro.

The New Zealand dollar slumped 1.1 percent to 70.35 U.S. cents, after reaching 70.28, the weakest since June 28.

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