BLBG:Yen Gains for Fourth Day Amid BOJ Speculation Before G-20
The yen climbed to the strongest in more than two weeks against the euro as Group-of-20 officials begin talks in Moscow, fueling speculation they may criticize Japanese policies that have helped weaken the currency.
The yen gained for a fourth day versus the dollar as investors speculated the next Bank of Japan governor may be the candidate who is the least aggressive on monetary stimulus. The euro declined after data yesterday showed recession in the currency bloc deepened at the end of last year. The New Zealand dollar reached the highest level in almost 1 1/2 years after retail sales jumped.
“What we’re seeing right now is a bit of a fright with the G-20 meeting happening in Moscow,” said Sonja Marten, a currency strategist at DZ Bank AG in Frankfurt. “The trend is going to resume and dollar-yen is going to go back up, quite possibly next week, once the G-20 is behind us.”
The yen strengthened 0.5 percent to 92.46 per dollar at 10:09 a.m. London time after gaining 0.6 percent yesterday. It appreciated 0.6 percent to 123.32 versus the euro after touching 122.90, the most since Jan. 30. The 17-nation common currency dropped 0.2 percent to $1.3337. It declined to $1.3311, the lowest since Jan. 24.
The so-called kiwi rose to 85.34 U.S. cents, the strongest since Sept. 2, 2011, before trading little changed at 85.
G-20 finance ministers and central bankers meeting in the Russian capital will reaffirm a pledge to “refrain from competitive devaluation” and commit to monitoring “possible monetary-policy spillover,” according to a draft statement obtained by Bloomberg and dated Feb. 11.
Leading Contender
The yen headed for a second weekly gain versus the euro after Reuters reported that former BOJ Deputy Governor Toshiro Muto is the leading contender to become the next central bank chief, citing people close to the selection process.
BOJ Governor Masaaki Shirakawa, criticized by politicians for not doing enough to end deflation, said last week he’ll step down on March 19, about three weeks before his five-year term is due to end. Prime Minister Shinzo Abe is close to choosing his nominee for the top BOJ post, and the decision may come in a few days, Reuters reported.
“Muto is perceived as not as dovish as some of the candidates, so that’s weighing on dollar-yen,” said Sean Callow, a senior currency strategist in Sydney at Westpac Banking Corp. “A significant amount of the yen’s decline has been in not so much what the BOJ has done in the period but what they’re expected to do in the next year or two.”
Japan’s currency has tumbled 15 percent in the past three months, the worst performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar declined 1.4 percent and the euro rose 3.3 percent.
European Central Bank Governing Council member Jens Weidmann today said a rising euro alone won’t trigger interest- rate cuts.
To contact the reporter on this story: Kevin Buckland in Tokyo at kbuckland1@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
