The
yen rose against its 16 major peers after Japanese data showed domestic
investors sold foreign bonds for a fifth week, casting doubt on whether Bank of
Japan (8301) monetary stimulus will continue to weaken the currency.
Demand
for the yen was also supported after the world’s third-largest economy posted a
narrower-than-estimated trade deficit last month. The Dollar Index (DXY)
remained higher as Asian stocks fell, boosting demand for the greenback as a
haven.
“This
tremendous weakening in the yen has produced little more than profit taking by
the Japanese themselves,” said Sean Callow, senior foreign-exchange strategist
in Sydney at Westpac Banking Corp. (WBC) “It gives the impression that money is
not flowing out of Japan at all right now, so it’s at least cause for investors
to have a bit of a rethink” about the effectiveness of BOJ policy.
The
yen rose 0.4 percent to 97.69 per dollar as of 10:06 a.m. in Tokyo after losing
1.4 percent in the previous two days. It gained 0.5 percent to 127.21 per euro.
The dollar traded little changed at $1.3024 per euro following a 1.1 percent
gain yesterday.
The
Dollar Index, which tracks the greenback against the currencies of six major
trade partners, was little changed at 82.636 after climbing 1.1 percent
yesterday. The MSCI Asia Pacific Index of shares fell 0.9 percent.
(Source: Bloomberg)
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