The dollar rose to a four-month high against the yen on speculation a recovery in the US labor market will encourage the Federal Reserve to end its policy of keeping interest rates near zero.
“With the plethora of data confirming a pick-up of the economy, speculation about an early exit from stimulus in the US is increasing,” said Shuzo Kakuta, a senior foreign- exchange adviser at Tokyo Tomin Bank Ltd. “This will give impetus to the dollar.”
The US currency rose as high as 93.77 yen, the strongest level since Aug. 28, before trading at 93.55 yen as of 9:22 a.m. in Tokyo from 93.37 yesterday in New York. The dollar traded at $1.4309 per euro from $1.4308. The yen dropped to 133.87 per euro from 133.58.
The yen headed for a third weekly loss against the euro after Kan said yesterday he will seek to keep the currency at “an appropriate level while considering various impacts on the economy that may be caused by currencies.”While the yen has weakened 9% since reaching a 14- year high in November, “I hope it will correct a bit more,” Kan said.
Japan’s currency climbed to 84.83 per dollar on Nov. 27, the strongest since July 1995. Then-Finance Minister Hirohisa Fujii, who resigned earlier this week, had said he didn’t support a weak yen and opposed “easy intervention.” Central banks intervene by buying or selling foreign exchange to influence exchange rates.
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