“The yen fell for a sixth day against the euro before the Bank of Japan starts a two-day meeting tomorrow with newly elected Prime Minister Shinzo Abe pressing policy makers to increase stimulus.
Japan’s currency was near a 20-month low versus the dollar after Abe said he told BOJ Governor Masaaki Shirakawa today that he wants to increase the inflation target. The euro rose for a seventh day against the dollar, the longest run since April 2011, after Spain and Greece met their targets at bill sales. Sweden’s krona jumped after the central bank signaled it probably won’t cut interest rates next year, even as it lowered its benchmark today.
“Fears that the new Abe government is going to announce something quite drastic are diverting flows into other currencies,” said Peter Frank, global head of currency strategy at Banco Bilbao Vizcaya Argentaria SA (BBVA) in London. “The euro is benefiting. There’s an absence of negative risk for the euro right now.”
The yen dropped 0.1 percent to 110.59 per euro at 7:12 a.m. New York time after sliding to 111.32 yesterday, the weakest level since March 21. Japan’s currency was little changed at 83.87 per dollar after falling to 84.48 yesterday, the lowest since April 12, 2011. The euro gained 0.2 percent to $1.3186.
Abe, whose Liberal Democratic Party swept to victory in elections for the lower house of Japan’s Parliament on Dec. 16, will have the chance to reshape the BOJ next year, when the terms of its governor and two deputies expire.”
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