“The yen fell against the dollar, halting a two-day gain, as Prime Minister Shinzo Abe met central bank governor Masaaki Shirakawa and said he wants the Bank of Japan (8301) to double its inflation goal to 2 percent.
Japan’s currency weakened at least 0.2 percent versus all its 16 major counterparts after Shirakawa said the BOJ was in close contact with the government, adding to speculation policy makers will boost stimulus that tends to debase the currency. The euro fell for a second day against the dollar before the European Central Bank meets tomorrow to decide on interest rates. Norway’s krone weakened after Trade Minister Trond Giske said its recent strength was “worrisome.”
“There are rumors that the BOJ will be open to changing the inflation target and this is something that weakens the yen,” said Antje Praefcke, a senior currency strategist at Commerzbank AG in Frankfurt. “The trend for yen weakness should continue.”
The yen fell 0.4 percent to 87.43 per dollar at 7:02 a.m. in New York after strengthening 1.3 percent in the previous two days. Japan’s currency declined 0.2 percent to 114.07 per euro after depreciating to 115.99 on Jan. 2, the weakest since July 8, 2011. The euro fell 0.3 percent to $1.3048.
Commerzbank recommends selling the yen should it strengthen beyond 87 per dollar and predicts it will weaken to 90 per dollar, Praefcke said…..”
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