By Barbara Kollmeyer and Carla Mozee, MarketWatch
MADRID (MarketWatch) -- The Japanese yen edged higher Monday, extending gains following the U.S. dollar’s worst weekly performance against its rival in about a year and as Japan stocks continued to fall.
In one session last week, the Nikkei Stock Average JP:NIK -3.22% fell 7.3%, its sharpest decline since March 2011, as remarks from Bank of Japan Gov. Haruhiko Kuroda failed to ease worries about a sudden rise in Japanese government-bond yields. On Monday, Japanese stocks extended last week’s losses.
The climb in yields, notably last week’s rise in the 10-year JGB yield to 1% for the first time in more than a year, came despite the central bank’s large-scale bond buys to pull down yields and borrowing costs for consumers and to encourage spending by businesses.
Kuroda also said last week that the central bank would continue to target a rise of 2% in the core consumer price index over the next two years.
“This in turn suggests that they will not become less aggressive anytime soon,” wrote Oliveri. Overall, “we expect this week’s [dollar-yen rate] downside to prove corrective and dips in the pair to be a buy.”
A few members of the central bank’s monetary-policy board raised concerns about decreases in liquidity in the Japanese government-bond market, according to minutes released Monday from the board’s meeting late last month.
While the yen has marked gains recently against the dollar, the dollar is still up nearly 9% against the yen since the Bank of Japan started its bond-buying operation in early April, and is up 24% since mid-November when anticipation the bank would adopt an aggressive monetary-policy stance accelerated.
The Australian dollar AUDUSD -0.15% , meanwhile, fell to 96.28 U.S. cents, down from 96.50 U.S. cents on Friday. The Aussie has remained below parity since mid-May, feeling the weight in part from concerns about slowing in China, Australia’s largest trading partner, and a possible wind-down in liquidity from the Federal Reserve if the U.S. economy remains on the recovery path.
The British pound GBPUSD -0.19% was unchanged from Friday at $1.5107, and the euro EURUSD +0.04% bought $1.2941, slightly off from $1.2941 on Friday.
The ICE dollar index DXY -0.05% , a gauge of the greenback’s movement against six other major currencies, rose to 83.599 from 83.604.
The WSJ Dollar Index XX:BUXX -0.04% , an alternative measure of the currency’s moves against a slightly wider basket, was down at 75.23 from 75.26.
Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @MWBarbaraKollmeyer.
Carla Mozee is a reporter for MarketWatch, based in Los Angeles. Follow her on Twitter @MWMozee.
