BLBG:Yen Climbs Versus Peers as BOJ Holds Inflation Target at 1%
The yen held gains against all of its major peers after the Bank of Japan (8301) maintained its 1 percent inflation goal after incoming Prime Minister Shinzo Abe called for a doubling of the target.
The Japanese currency snapped a three-day decline versus the dollar after the BOJ expanded its asset-purchase fund by 10 trillion yen ($118.8 billion) to 76 trillion yen and said it plans to examine its price goal at the next meeting. The dollar held onto a rally from eight-month low versus the euro amid concern that U.S. lawmakers are failing to make progress in budget talks, boosting demand for refuge assets.
“Investors might have wanted to hear more details on the inflation target from the BOJ, pushing the yen higher,” said Masafumi Yamamoto, the Tokyo-based chief foreign-exchange strategist at Barclays Plc. “The policy decision itself came in line with expectations.”
The yen strengthened 0.4 percent to 111.24 per euro at 1:34 p.m. in Tokyo from the close yesterday, when it touched 112.50, the weakest level since August 2011. The Japanese currency rose 0.3 percent to 84.15 per dollar, after falling 1.1 percent over the previous three days.
The euro was little changed at $1.3222 per dollar, after earlier falling as much as 0.3 percent. It reached $1.3308 yesterday, the highest since April 3.
Abe, poised to become the next prime minister, said this week he asked BOJ Governor Masaaki Shirakawa to agree to an accord with a 2 percent inflation target. Abe has called for unlimited easing by the central bank to end deflation and revive growth. Shirakawa is due to step down as BOJ governor in April.
Cliff Talks
Officials in President Barack Obama’s administration told leaders of business and financial services groups that negotiations with Boehner deteriorated in the last 24 hours, a person familiar with the meeting said.
The officials said that Republican plans to push forward with Boehner’s alternative proposal on taxes and spending risks pushing the government past the deadline when automatic spending cuts and tax increases kick in, said the person, who asked for anonymity to discuss the private talks.
To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.net; Hiroko Komiya in Tokyo at hkomiya1@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
