The yen fell to the lowest in more than two years on prospects Japanese Prime Minister Shinzo Abe will select a central bank chief who will expand monetary easing efforts to accelerate the currency’s decline.
Abe said yesterday he wants someone “who can push through bold monetary policy” as the next governor of the Bank of Japan, which meets on policy Jan. 21-22. The dollar sank to a more than 10-month low against the euro as Federal Reserve Bank of Chicago President Charles Evans said the central bank should keep policy accommodative to support the economy. Demand for the greenback was also limited before data tomorrow that may show manufacturing in the New York region failed to expand.
“There is a huge expectation built in about what the Bank of Japan will need to deliver to validate the moves to date,” said Ray Attrill, the Sydney-based global co-head of currency strategy at National Australia Bank Ltd. “We expect a correction in the yen, but the most likely time is perhaps after the BOJ meeting.”
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