USD/JPY Back Below 121

The yen rose versus the dollar, extending yesterday’s biggest jump in seven weeks, amid speculation its decline had gone too far as data showed Japan’s current-account surplus was twice what economists forecast.

The Japanese currency strengthened against all 16 major counterparts. A gauge of the dollar slipped following the biggest weekly rally in more than a year. Emerging-market currencies slumped, led by South Africa’s rand and Russia’s ruble, after Chinese imports unexpectedly fell in November.

“There wasn’t much for the market to trade on, so investors took profit on long dollar-yen positions after Friday’s blowout payrolls number,” Yujiro Goto, a currency strategist in London at Nomura Holdings Inc., said yesterday. “The yen was the strongest among G-10 currencies, but the market hasn’t really changed its view that the trend is for a weaker yen.”


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