“The yen weakened to the lowest level in almost three years against the dollar and Japanese stocks led global shares higher on speculation Prime Minister Shinzo Abe will nominate a central bank chief who favors stimulus. The euro gained as Italy voted in general elections.
The yen depreciated 0.4 percent to 93.75 per dollar at 7:05 a.m. in New York and earlier traded at its lowest level since May 2010. The euro strengthened 0.6 percent to $1.3271 and Italian bonds advanced. The Nikkei 225 Stock Average (NKY) surged 2.4 percent to its highest level since September 2008, helping the MSCI All-Country World Index gain 0.5 percent. Standard & Poor’s 500 Index futures increased 0.5 percent. Silver climbed 1.5 percent and U.K. natural gas jumped to a one-year high.
Abe is likely to call on Asian Development Bank PresidentHaruhiko Kuroda, who said this month there is “substantial room” for easing, and Kikuo Iwata as his deputy, according to two officials with knowledge of the discussions. Initial estimates of Italy’s election results are due after 3 p.m. in Rome, with Pier Luigi Bersani the front-runner in opinion surveys two weeks ago.
“The market seems to have formed an opinion that Kuroda is a dove and if he indeed becomes the new BOJ governor, he would be willing to do much more to support growth,” saidGeoffrey Yu, a senior currency strategist at UBS AG in London. “The yen is weakening on speculation that there will be more policy easing.”
The yen weakened against all 16 of its major peers, losing 1 percent versus the euro. Japan’s currency has dropped 6.7 percent this year, the biggest loser among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The pound has seen the second-biggest decline, falling 5.9 percent.
