Yen falls against Dollar and Euro for the second day. Yen weakens for the second day versus peers in anticipation of U.S. jobs report. Conditions in Asia and the U.S. will sustain global growth activity at a reasonable level and prevent Europe from dragging the global economy into a severe downturn.”
Yen Falls Versus Peers on Stock Gain, Before Jobs Report
The yen weakened for a second day against the dollar and euro before U.S. data tomorrow forecast to show the job market is improving, reducing demand for the safety of Japan’s currency.
The yen fell versus all 16 of its major counterparts after Bank of Japan (8301) Deputy Governor Kiyohiko Nishimura said the central bank is ready to implement additional easing, and the International Monetary Fund yesterday raised its global growth forecasts. The pound approached an 18-month high against the euro before the Bank of England releases minutes of its April policy meeting today.
“Conditions in Asia and the U.S. will sustain global growth activity at a reasonable level and prevent Europe from dragging the global economy into a severe downturn,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. “We’ll see some strength in a range of currencies against the yen.”
Japan’s currency declined 0.4 percent to 106.48 per euro at 8:29 a.m. London time after falling 0.4 percent yesterday. The yen weakened 0.5 percent to 81.28 per dollar. The euro dropped 0.2 percent to $1.3097.
U.S. initial jobless claims fell to 370,000 last week from 380,000 in the previous period, according to the economists surveyed by Bloomberg News before the Labor Department data tomorrow. Separate U.S. reports this week are forecast to show manufacturing in the Philadelphia region expanded and existing home sales increased.
The yen fell the most against the South Korean won and Norwegian krone after Nishimura said it is vital to make efforts to support the upward momentum toward an economic recovery. The BOJ is “committed to implementing additional easing measures, if deemed necessary,” he said in a speech today.
The Bank of Japan may boost its 2012 forecast for the consumer price index, excluding food, to a range of zero to 0.5 percent from the 0.1 percent projected in January, the Nikkei newspaper reported, citing people familiar with the bank’s thinking. The BOJ, which set a 1 percent inflation goal on Feb. 14, will next meet on April 27.
The yen remains weaker than 80 per dollar “because expectations are strong that the BOJ will ease monetary policy further at its next meeting,” said Kazuo Shirai, a trader at Union Bank NA in Los Angeles. “Because markets are expecting so much, if nothing is announced, dollar-yen is more likely to drop below 80.”
The IMF raised its global growth estimates for the first time in more than a year. The world economy will expand 3.5 percent this year, compared with a January projection of 3.3 percent, the fund said in its World Economic Outlook. It sees growth of 4.1 percent in 2013, up from 4 percent. The organization raised its forecasts for the U.S. to gains of 2.1 percent this year and 2.4 percent in 2013.
The yen has dropped 7.5 percent in the past three months, the worst performance among the 10 developed-nation currencies tracked by Bloomberg Correlation Weighted Indexes. The dollar dropped 1.5 percent and the euro gained 0.5 percent.
The pound advanced for a second day against the euro after a U.K. report yesterday showed consumer prices climbed 3.5 percent in March from a year earlier, above the central bank’s 2 percent target.
The Bank of England will publish today the minutes of its April 5 meeting, when officials maintained the quantitative- easing program at 325 billion pounds ($517 billion).
The previous minutes released on March 21 showed two members of the monetary policy committee said a “larger monetary stimulus was warranted” to protect the economy from the effects of prolonged weak growth.
The U.K. currency gained 0.1 percent to 82.36 per euro after rising to 82.10 on April 16, the strongest level since September 2010. Sterling was little changed at $1.5906.
The pound needs to climb above $1.5986 to invalidate “further weakness,” MacNeil Curry, head of foreign-exchange and interest-rates technical strategy at Bank of America Corp. in New York, wrote in a note yesterday. That level is on the right half of a so-called head-and-shoulders pattern on the pound’s chart, Curry wrote. That rate was last seen on April 12.
A head-and-shoulders pattern is formed when a currency makes three consecutive peaks, with the middle being the highest. A neckline is drawn across the base of the three peaks. (David Goodman and Masaki Kondo – Bloomberg)