The yen fell to a three-year low against the euro after Bank of Japan policy makers affirmed a plan to double the monetary base over two years and their statement made no reference to rising bond yields.
Japan’s currency declined versus 13 of its 16 major peers after a government report showed the trade deficit swelled more in April than economists forecast and exports were lower than estimated. The dollar dropped for a third day against the euro before Federal Reserve Chairman Ben S. Bernanke addresses Congress and the Federal Open Market Committee release minutes of its most recent policy meeting. The Australian dollar approached an 11-month low after consumer confidence slumped.
“The yen appears to have got its first push lower from disappointing trade data that showed the weaker yen trend still has some way to go before Japan can correct its widening trade deficit,” said Eimear Daly, a currency analyst at Monex Europe Ltd. in London. “A failure of the BOJ minutes to mention rising yield levels allowed the yen to move further.”