BLBG: Yen Reaches Strongest Versus Dollar Since Intervention as U.S. Data Slows
The yen reached the strongest level versus the dollar since the Bank of Japan intervened to weaken the currency as a report showed weakern-than-forecast U.S. consumer confidence, boosting demand for haven assets.
The Bank of Japan sold yen Sept. 15 to stem an 11 percent surge in the currency that hampered an export-led economic recovery. The dollar traded at almost a five-month low against the euro as consumer sentiment dropped and U.S. home prices rose at a slower pace in July, fueling speculation the Federal Reserve will resume quantitative easing, or the large-scale purchase of debt, to bolster the economy.
“This should benefit the yen in a shift from higher yielding assets to lower, more safe-haven assets,” said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York. “Clearly this is negative for the dollar because of the implications of more quantitative easing.”
The yen strengthened 0.4 percent to 83.92 yen per dollar as of 10:09 a.m. in New York, from 84.29. It touched 83.87, the highest level since Sept. 15, when it also touched a 15-year low of 82.88. The dollar fell 0.3 percent to $1.3489 per euro, compared with $1.3455 yesterday, when it slid to $1.3507, the weakest level since April 20.
The euro bought 113.44 yen, compared with 113.41 yen, after touching 112.67 yen.
The Ministry of Finance in Tokyo will report on Sept. 30 the amount of yen the central bank sold from Aug. 28 through Sept. 28, to curb the appreciation of the currency.
To contact the reporter on this story: Allison Bennett in New York at abennett23@bloomberg.net; Catarina Saraiva in New York at asaraiva5@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
