The yen extended its three-week decline against the euro after Deputy Governor Kikuo Iwata reiterated the Bank of Japan’s commitment to unprecedented monetary easing.
The euro traded near a two-year high against the dollar before the Federal Reserve begins a two-day meeting tomorrow, with economists predicting policy makers will refrain from tapering stimulus. Japan’s currency weakened against all its major peers as the BOJ is also due to meet this week, and is expected to maintain its more than 7 trillion yen ($72 billion) in Japanese government bonds each month to end deflation.
“The Bank of Japan, the Fed and the Bank of England are still effectively printing money, and the ECB is not. It’s a natural trade for the euro to strengthen,” Derek Mumford, a director at Rochford Capital, foreign-exchange risk-management company in Sydney, said referencing the European Central Bank and its global peers. “I still think the yen will weaken.”
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