USD/JPY Moves Strongly to 105.40 on Central Banks

Haruhiko Kuroda and Mario Draghi’s unprecedented easing policies are bearing fruit in the world’s biggest market, sending the yen to an almost six-year low and the euro toward its longest weekly losing streak since 1997.

The dollar rose amid prospects for higher U.S. interest rates and before data today forecast to show employers boosted payrolls in August by more than 200,000 for a seventh month. The yen fell after the Bank of Japan kept its record stimulus unchanged yesterday. The 18-nation euro dropped to the lowest in almost 14 months yesterday after the European Central Bank signaled purchases of asset-backed securities from next month and unexpectedly cutting the main refinancing rate to a record.

“The policy divergence between Japan and the U.S.,” along with a decline in the euro has helped weaken the yen, said Daisuke Karakama, chief market economist at Mizuho Bank Ltd. in Tokyo. “I expect the yen to test 108 by the end of next month as the Fed normalizes policy.”


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