Yen Strengthens against Peers on Recovery Signs

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Tradervox.com (Dublin) - The Japanese currency rose against its major counterparts after data showed retail sales in the country grew more than economists had projected. Unemployment rate was also reported to have dropped. The currency surged as the Bank of Japan officials prepare to meet today. Japan’s currency halted a two-day slide versus the dollar as falling Asian stocks boosted demand for haven assets and futures traders trimmed bearish bets on the currency to the least in a year. The euro rose to a two-month high versus the pound before a report due today that may show stronger consumer sentiment in France, Europe’s second-largest economy. The Aussie dollar fell after Reserve Bank of Australia Governor Glenn Stevens said the currency will probably be “materially lower.”

According to Jerry Schiff, a Tokyo-based International Monetary Fund’s mission chief, economists agree that the yen is somewhat undervalued and the BOJ does not have to do anything different from what they are currently doing. He also noted that despite the effects of the enormous monetary accommodation announced by the BOJ being slow, the inflation and inflation expectations are moving in the right direction.

Japan’s currency gained 0.2 percent to 134.39 per euro at 1:49 p.m. in Tokyo from yesterday. It added 0.1 percent to 97.57 per dollar. The yen is set for a 0.7 percent rise against the greenback and 1.1 percent drop versus the euro this month. The dollar was little changed at $1.3776 per euro from yesterday, poised for a 1.8 percent decline this month. It touched $1.3832 on Oct. 25, the weakest since November 2011.

The shared currency reached 85.72 pence, the highest since Aug. 29, before trading at 85.59, 0.2 percent above yesterday’s close. Australia’s dollar sank 0.6 percent to 95.14 U.S. cents, after earlier dropping to 95.05, the lowest since Oct. 16. The MSCI Asia Pacific Index of stocks declined 0.4 percent.

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