Published : 2013-01-21 21:02
Updated : 2013-01-21 21:04
The yen strengthened from its weakest level against the dollar since June 2010 as Bank of Japan officials started a two-day policy meeting.
Japan’s currency has declined 5.9 percent versus the greenback in the past month on speculation the BOJ, under pressure from the government of new Prime Minister Shinzo Abe, will boost stimulus to lift the economy out of recession. Technical indicators signaled the yen’s drop may have been overdone and data showed traders became the least bearish on the currency in eight weeks. The Swiss franc advanced versus all but one of its 16 major peers.
“It’s hard to see what the BOJ could say tomorrow that would exceed market expectations,” said Daragh Maher, a currency strategist at HSBC Holdings Plc in London. “It’s a natural positioning ahead of the Bank of Japan’s meeting given the yen decline.”
The yen appreciated 0.7 percent to 89.51 per dollar at 6:43 a.m. New York time after depreciating to 90.25, the weakest since June 23, 2010. Japan’s currency gained 0.8 percent to 119.07 per euro. The dollar was little changed at $1.3302 per euro and the franc advanced 0.4 percent to 1.2398 per euro.
U.S. financial markets are shut today for a public holiday.
All 23 economists in a Bloomberg News survey predict the BOJ will expand asset purchases this week, with the median estimate for a 10 trillion-yen increase. Abe has announced a spending package of similar size and is calling on the central bank to double its inflation target to 2 percent.