“The yen strengthened for the first time in three days against the dollar and euro as Japanese finance minister Taro Aso said the government doesn’t intend to buy foreign bonds to end deflation by weakening the currency.
The yen rose from near the weakest since May 2010 versus the U.S. currency as his comments countered those of Prime Minister Shinzo Abe who said yesterday purchasing overseas bonds “exists as one idea” for monetary policy. South Africa’s rand fell for a third day as clashes between labor unions at a mine spurred concern of a repeat of violence that curbed production last year. Australia’s dollar strengthened as the central bank said an improved global outlook boosted commodity prices.
“The market is paring back more aggressive expectations in terms of Bank of Japan policy easing going forward,” said Lee Hardman, a foreign-exchange strategist at Band of Tokyo- Mitsubishi UFJ Ltd. in London. “Further easing from the BOJ is likely to come in the form of domestic instruments. We could be moving to a period of more stability for the yen after a sharp adjustment lower in the past three months.”
The yen gained 0.5 percent to 93.52 per dollar at 7:44 a.m. in New York after sliding to 94.46 on Feb. 11, the weakest level since May 5, 2010. Japan’s currency advanced 0.6 percent to 124.73 per euro. The euro fell 0.1 percent to $1.3337.
Japanese officials have toned down calls for a weaker yen to help exporters after trade partners complained the nation risked setting off a currency war. Since Abe called for unlimited money printing by the central bank when he was opposition leader on Nov. 15, the yen has slid 13 percent against the dollar, the biggest drop among the major currencies.
