Yen climbs back near 15-year high versus dollar

By Wanfeng Zhou

NEW YORK (BestGrowthStock) – The yen neared a 15-year high against the dollar on Tuesday as investors shrugged off the Bank of Japan’s latest easing move, betting on yen gains that would again test authorities’ readiness to intervene.

Mounting U.S. economic concerns are likely to keep investors away from riskier assets and push up the safe-haven yen. That could eventually prompt Japan to sell its currency in the markets for the first time in more than six years.

“The policy action by the BoJ isn’t going to change the market’s mood. It would probably take intervention to shake things up a bit,” said Vassili Serebriakov, currency strategist at Wells Fargo in New York. “But we’re not even sure that would cause a sustained reversal of yen strength.”

The dollar got a little support from data showing U.S. consumer confidence rose modestly in August, lifted by a mild improvement in the short-term outlook.

In mid-morning trading, the dollar was down 0.2 percent at 84.45 yen. It had earlier fallen to 84.06, according to Reuters data, not far from its 15-year low of 83.58 set on electronic trading platform EBS last week

“We got a surprisingly nice number from consumer confidence, given that sentiment has been so negative lately,” said John Doyle, senior strategist at Tempus Consulting in Washington.

But he added that while the data paints a slightly rosier picture for the U.S., the trend is still for softer growth. Investors will scrutinize the minutes from the Federal Reserve’s most recent policy meeting due out later in the day and jobs data on Friday for more clues about the economy, he said.

The euro rose 0.5 percent against the dollar to $1.2726, helped in part by strong job numbers from Germany.

Japanese Finance Minister Yoshihiko Noda repeated on Tuesday that the government would take decisive action on currencies — usually seen as code for intervention — when necessary. But the reaction in the market was limited.

On Monday, the Bank of Japan expanded cheap loans to banks, a move seen as a symbolic gesture that will do little to halt the currency’s climb.

“These measures seem more suited to dealing with the negative economic effects of yen strength, rather than directly addressing the currency, suggesting more than a little hesitation in meeting the issue head-on at current dollar/yen valuations,” said Sacha Tihanyi, currency strategist at Scotia Capital in Toronto.

The dollar has fallen 2.3 percent against the yen this month and is down more than 9 percent this year.

Traders say Japanese authorities are expected to buy the dollar against the yen if the dollar slides 3-4 yen in one day.

The euro slumped to a record low against the safe-haven Swiss franc, removing barriers at 1.2900 on the way. The euro fell (Read more about the trembling euro. ) as low as 1.2898 francs on trading platform EBS. The dollar fell to a seven-month low against the Swiss francs.

(Additional reporting by Steven C. Johnson and Anirban Nag in London; Editing by Chizu Nomiyama)

Yen climbs back near 15-year high versus dollar