The yen headed for its first weekly decline against the dollar in two months after inflation slowed and industrial production slumped, adding to speculation the Bank of Japan will pump cash into the economy at a faster pace.
The yen was on course for a third weekly decline versus the euro as BOJ policy board member Hidetoshi Kamezaki said the central bank may consider “extraordinary steps” to improve access to funding for companies. The dollar fell for a fifth week against the euro as industry reports showed the U.S. recession caused holiday season spending to decline.
“Panicked buying of the yen has come to an end,” said Mitsuru Sahara, senior currency sales manager at Bank of Tokyo- Mitsubishi UFJ Ltd., a unit of Japan’s biggest lender by assets. “The BOJ has done what it can do in response to a global downturn and has effectively adopted a quantitative easing policy.”
The yen traded at 90.42 per dollar as of 6:42 a.m. in London from 90.38 late yesterday in New York. It weakened to 90.99 on Dec. 23, the lowest since Dec. 15. Against the euro, the yen was at 127.07 from 126.67. The euro bought $1.4060 from $1.4025. The yen may move between 90 and 90.80 versus the dollar today, Sahara said. Trading volumes may be less than normal as financial markets are closed today in Australia, Hong Kong and the U.K., he said.
Quantitative easing, in which policy makers focus more on providing cash through debt purchases than on lowering interest rates, can weaken a currency because it increases its overall supply in the financial system.
From Bloomberg News.
The yen was on course for a third weekly decline versus the euro as BOJ policy board member Hidetoshi Kamezaki said the central bank may consider “extraordinary steps” to improve access to funding for companies. The dollar fell for a fifth week against the euro as industry reports showed the U.S. recession caused holiday season spending to decline.
“Panicked buying of the yen has come to an end,” said Mitsuru Sahara, senior currency sales manager at Bank of Tokyo- Mitsubishi UFJ Ltd., a unit of Japan’s biggest lender by assets. “The BOJ has done what it can do in response to a global downturn and has effectively adopted a quantitative easing policy.”
The yen traded at 90.42 per dollar as of 6:42 a.m. in London from 90.38 late yesterday in New York. It weakened to 90.99 on Dec. 23, the lowest since Dec. 15. Against the euro, the yen was at 127.07 from 126.67. The euro bought $1.4060 from $1.4025. The yen may move between 90 and 90.80 versus the dollar today, Sahara said. Trading volumes may be less than normal as financial markets are closed today in Australia, Hong Kong and the U.K., he said.
Quantitative easing, in which policy makers focus more on providing cash through debt purchases than on lowering interest rates, can weaken a currency because it increases its overall supply in the financial system.
From Bloomberg News.