The yen dropped to its lowest level against the dollar since October 2008 as the yield spread between Treasuries and Japanese government bonds approached the widest since April 2011.
Japan’s currency headed for a seventh weekly decline against the dollar before the Federal Reserve and the Bank of Japan both meet next week to set policy.
“The prospect of Fed tapering, either sooner or later, and continued monetary easing by the Bank of Japan remain a powerful driver of dollar-yen gains specifically, and obviously broad yen traded-weighted depreciation,” said Callum Henderson, global head of currency research at Standard Chartered Plc in Singapore. The level of “103.74 was just a number, and now it’s irrelevant.”
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