Yen Set for Steepest Drop in 9 Weeks Versus Dollar on BOJ

Yen Set for Steepest Drop in 9 Weeks Versus Dollar on BOJ

The yen headed for its biggest weekly decline against the dollar since August amid speculation the Bank of Japan (8301) will boost stimulus measures, reducing demand for the nation’s assets as a haven.
Japan’s currency was poised for a weekly loss versus the euro as Greece moved closer to winning a delayed aid disbursement after a European Union summit at which leaders also committed to creating a regional bank supervisor by year-end. The pound strengthened for the first time in four days against the euro after a government report showed Britain posted its smallest September budget deficit since 2008.
“There’s speculation that the Bank of Japan may add liquidity, also that the government may unveil another stimulus plan for the economy,” said Roberto Mialich, a senior currency strategist at UniCredit SpA in Milan. “That’s probably one of the reasons behind the yen weakening.
The yen was little changed at 79.26 per dollar as of 6:01 a.m. in New York after dropping to 79.47 yesterday, the weakest level since Aug. 21. Japan’s currency fell 1.1 percent this week, the most since the period ended Aug. 17. The yen traded at 103.39 per euro, having declined 1.8 percent since Oct. 12. The euro fell 0.2 percent to $1.3045.
BOJ policy makers next meet on Oct. 30 and will release updated economic projections for the 2012 and 2013 fiscal years, along with the first set of forecasts for the 12 months beginning in April 2014. At their previous meeting, which ended on Oct. 5, they refrained from additional monetary easing after adding to stimulus in September.