MW Dollar eases as yen brushes past Kuroda’s negative-rates talk
The U.S. dollar pulled lower against the yen on Monday, with the Japanese currency pushing past rate-cut remarks by the head of the Bank of Japan.
The greenback USDJPY, -0.54% traded at ¥100.44, down from ¥101.00 late Friday in New York. That contributed to a 0.1% slip in the U.S. Dollar Index DXY, -0.19% a gauge of the greenback’s strength against six rivals, to 95.381.
Losses in Japanese stocks on Monday prompted buying in the yen, with bank and insurer shares in Tokyo hit as Bank of Japan Governor Haruhiko Kuroda reaffirmed his pledge to whatever it takes to boost growth and inflation, including taking interest rates further into negative territory, according to media reports.
“Kuroda spoke ... optimistically regarding the scope of monetary policy for Japan and went as far as to say that there was no better time to achieve the inflation target than now. His comments did little to weaken the yen as USDJPY remains at the 100 level as uncertainty persists regarding the U.S. rate hike,” said Ana Thaker, market economist at PhillipCapital UK, in a note.
Eisuke Sakakibara, Japan’s former finance ministry official who is also known as Mr. Yen, told Bloomberg News in an interview that he expects the yen will slowly reach ¥90 against the dollar by the end of next year, as the Bank of Japan stimulus is reaching its limit
In other market moves, the euro EURUSD, +0.3028% was at $1.1264, up from $1.1224 late Friday. The currency drifted higher after the Ifo German business sentiment index rose in September, hitting its highest level since May 2014.
The pound GBPUSD, -0.2699% was buying $1.2927, down from $1.2967. Accounting firm KPMG in a survey released Monday said 76% of 100 U.K. corporate chief executives it polled were thinking of moving their headquarters or their operations out of Britain following the June vote by the U.K. to leave the European Union.
Sterling on Friday dropped after U.K. Foreign Secretary Boris Johnson said he expects his country will start formal Brexit negotiations early next year.
Meanwhile, currency market participants are also awaiting the first U.S. Presidential debate between Hillary Clinton and Donald Trump later Monday in the U.S. The debate will start at 9 p.m. Eastern Time.
Read: Clinton-Trump debate showdown carries potential to sock stocks
The WSJ Dollar Index BUXX, -0.18% a measure of the dollar against a basket of major currencies, was down 0.2% at 86.34.
