The yen rose for a third day against the dollar, the longest run of gains in almost two months, amid speculation measures announced by the Bank of Japan (8301) will not be enough to boost economic growth and weaken the currency. The yen gained against all of its 16 major counterparts before consumer-price data this week forecast to show the BOJ’s policies have failed to stoke inflation. The central bank increased its inflation target to 2 percent yesterday. South Korea’s won declined against the dollar after the nation’s finance minister said recent gains were too steep. “Adopting the 2 percent target was a relatively bold move, but they need to implement more credible policy to convince the market,� said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “What will be important for yen direction will be how the market assesses the effectiveness of their policy to meet that target.� The yen appreciated 0.4 percent to 88.33 per dollar as of 6:27 a.m. New York time. It has strengthened 2 percent over the past three days, its longest run of gains since the period ended Nov. 26. It reached 90.25 on Jan. 21, the weakest level since June 2010. The yen strengthened 0.3 percent to 117.82 per euro. Europe’s shared currency rose 0.1 percent to $1.3337. Consumer Prices Japan’s consumer prices excluding fresh food fell 0.2 percent in December from a year earlier, following a 0.1 percent drop the previous month, according to the median of 23 estimates in a Bloomberg News survey before the data due on Jan. 25. That would be the biggest decline since August. The Bank of Japan forecast inflation will accelerate to 0.9 percent in the fiscal year starting April 2014. Japan’s currency has plunged about 8 percent against the greenback since Nov. 15 when Shinzo Abe called for unlimited monetary stimulus from the BOJ ahead of lower house elections that elevated him to prime minister. Amid pressure from Abe’s government, the BOJ yesterday doubled its inflation target. The yen fell 5.1 percent in the past month, the biggest decline among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro gained 1.3 percent and the dollar was little changed. Won Declines The won, Asia’s best-performing currency of 2012, fell toward this month’s low after Finance Minister Bahk Jae Wan vowed to curb volatility, saying recent gains were excessive. The government is “all ready� for new measures, Bahk told reporters in Seoul, declining to comment on when they will be announced. The currency touched 1,054.49 on Jan. 15, a level not seen since August 2011, after rallying 8.3 percent last year. Overseas funds sold more South Korean shares than they bought on all but one of the last eight days, exchange data show. “Rising speculation that South Korea may take steps on the won’s gain, and the recent net sales in equities by foreigners are weakening the currency,� said Hong Seok Chan, analyst at Daishin Economic Research Institute in Seoul. “Some exporters may want to take profit to convert their proceeds, which may limit further declines in the won.� The won fell 0.4 percent to close at 1,066.18 per dollar in Seoul, according to data compiled by Bloomberg. It touched this month’s low of 1,067.77 yesterday. To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net Kristine Aquino in Singapore at kaquino1@bloomberg.net To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

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