The yen touched a one-month low as signs of economic improvement across the globe damped demand for refuge assets while data from Japan signaled progress in the central bank’s easing efforts.
Japan’s currency slid versus all its 16 major peers after data showed the nation’s monetary base expanded by the most in 40 years as Bank of Japan policy makers prepare to meet this week. The dollar touched a six-week high against a basket of developed currencies ahead of U.S. data that may signal growth in factory output, fanning speculation the Federal Reserve will start to taper its quantitative-easing program. The Australian dollar advanced and Indonesia’s rupiah fell to a four-year low.
“Our long-term view is that there will be yen weakness,” said Derek Mumford, a director at Rochford Capital, a foreign-exchange risk-management company in Sydney. The currency will “inevitably weaken, particularly against the dollar with the prospect of winding back of QE in the very near future by the Fed and the very fact that the BOJ will keep printing money.”
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