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USD/JPY up to 108 on Earnings

The dollar was 0.2 percent from a two-week high versus the yen before the Federal Reserve meets next week and as U.S. equities climbed on signs the world’s largest economy will withstand sluggish global growth.

The Bloomberg Dollar Spot Index held a three-day advance as earnings from Caterpillar Inc. to 3M Co. surpassed analysts’ estimates, spurring gains in the Standard & Poor’s 500 Index. U.S. Treasury 10-year yields climbed by the most in nearly six weeks yesterday. The yen is poised to drop against 15 of its 16 major peers this week amid waning demand for haven assets.

“As stocks stabilize, the fall in yields and dollar weakness have reversed,” said Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank in New York. “This risk-on trend might continue until FOMC next week. I think stock markets will stay firm on the back of solid earnings unless negative news such as Ebola comes out,” he said, referring to the Fed Open Market Committee which meets Oct. 28-29.

Bloomberg [1]

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