Yen hits 20-month low against US dollar
The yen touched a 20-month low versus the US dollar before data this week forecast to show Japan's consumer prices fell, adding to prospects that incoming prime minister Shinzo Abe will increase pressure on the nation's central bank to do more to end deflation.
Japan's currency declined against all of its 16 major counterparts yesterday after Mr Abe said he will consider changing the law governing the Bank of Japan unless it boosts its inflation target next month. Demand for the dollar was supported as investors sought the relative safety of the world's reserve currency amid concern that US lawmakers will fail to avoid the so-called fiscal cliff of tax increases and spending cuts.
"It seems like investors, especially people overseas, strongly want to sell the yen because of easing expectations," said Yuki Sakasai, a foreign-exchange strategist at Barclays. "Any further comment from Mr Abe could be seen as a selling catalyst for the yen."
The Japanese currency touched ¥84.96 per US dollar, the weakest since April 11, 2011. It fetched ¥111.90 per euro from ¥111.97, following a 0.8 per cent slide yesterday.
Japan's consumer prices excluding fresh food probably slid 0.1 per cent in November from a year earlier, according to the median estimate of economists in a Bloomberg News survey before the statistics office releases the data on December 28. The so-called core inflation rate has fallen at an average of 0.2 per cent every month in the past 10 years.
* Bloomberg News
Published: December 26, 2012 04:00 AM