The yen strengthened from almost a six-month low against the dollar as a decline in global equities spurred demand for the currency as a haven amid speculation its recent drop has been too rapid.
The U.S. currency rose against most of its 16 major peers on bets that a U.S. budget agreement will boost prospects for the Federal Reserve to start tapering its monetary stimulus. New Zealand’s dollar pared losses after the central bank stepped up signals it will start raising interest rates in the first half of next year as the economy strengthens. Australia’s dollar fell for the first time in five days before a report tomorrow forecast to show the unemployment rate climbed to match the highest since 2009.
“There are a lot of risk-off plays that are causing the yen to appreciate,” Ravi Bharadwaj, a Boston-based senior market analyst at Western Union Business Solutions, a unit of Western Union Co., said in a phone interview. “The empty Japanese economic calendar today has also added to the effect of the stock market on the yen.”
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