The yen dropped to a seven-year low against the dollar after Japanese Prime Minister Shinzo Abe called an early election and suspended a planned sales-tax increase.
The yen slid against most of its 16 major peers before the Bank of Japan sets policy today as Abe prepares to dissolve parliament. The Bloomberg Dollar Spot Index approached its highest in more than five years before the Federal Reserve releases minutes of last month’s meeting. New Zealand’s dollar ended a six-day gain after Auckland-based Fonterra Cooperative Group Ltd. said the price of milk powder fell.
“Abenomics needs to step up and step up quickly,” said Sam Tuck, a senior foreign-exchange strategist at ANZ Bank New Zealand Ltd. in Auckland. “Those policies that they promote will have a yen weakening effect.”
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