Yen Is Near 2 1/2-Year Low as Speculation Mounts about BOJ’s Next Move

The yen traded near a 2 1/2-year low amid speculation the Bank of Japan (8301) will decide to conduct open- ended asset buying to stoke inflation at a two-day policy meeting starting Jan. 21.

One-week implied volatility on the dollar against the yen surged to the highest in 17 months after Reuters reported the central bank may introduce the plan, citing people familiar with the BOJ’s thinking. Australia’s dollar was headed for a third- weekly advance before Chinese data today that may show growth accelerated in the world’s second-largest economy.

“Expectations for additional easing by the BOJ haven’t yet peeled off,” said Masato Yanagiya, the head of currency and money trading in New York at Sumitomo Mitsui Banking Corp., a unit of Japan’s second-biggest financial group by market value. “With rising implied volatility, there are quite a few people who are alerted by the pace of dollar-yen moves.”


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