The yen dropped to a two-week low against the dollar after China cut interest rates, spurring speculation stocks in Asia will climb and damp demand for haven assets.
A gauge of the greenback was less than 0.1 percent from the highest close since at least 2004 on prospects the Federal Reserve will raise interest rates this year, boosting the currency’s allure. Australia’s dollar weakened as traders predict the central bank will lower borrowing costs on Tuesday. Japanese companies’ profits rose 11.6 percent in the fourth quarter from a year earlier, a government report showed.
“China’s rate cuts improved risk sentiment while data showing Japanese corporate profits rose significantly supported buying Japanese equities, leading to the dollar’s gain against the yen,” said Nobuo Ichikawa, chief manager of foreign exchange financial products trading at Mitsubishi UFJ Trust and Banking Corp. in Tokyo.
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