The yen weakened for the first time in four days against the dollar before a change of leadership at the Bank of Japan (8301) tomorrow amid expectations for expanded monetary easing.
The Japanese currency declined versus most of its major peers as Asian stocks rebounded from yesterday’s biggest drop in more than seven months. The euro fell for a second day versus the dollar after media reports said Cyprus’s parliament will not approve a bank-deposit levy to help fund the nation’s bailout. New Zealand’s currency weakened after Finance Minister Bill English called the currency overvalued.
“The government is aggressively pushing Japan out of deflation and that’s resulted in currency weakness,” said Calvin Tse, a Hong Kong-based currency strategist at Morgan Stanley. New central bank leadership is “expected to engage in much more aggressive BOJ easing.”
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