Yen declines to 20-month low as Abe pushes for monetary stimulus

Real Strength

Brazil’s real gained against all its major counterparts, rising 1.5 percent to 2.0481 per dollar. The central bank is scheduled to auction as much as $2 billion in currency swaps.

Obama plans to leave his Hawaii vacation today and return to Washington, a White House aide said on condition of anonymity. Congress will resume negotiations tomorrow about more than $600 billion in tax increases and spending cuts due to take effect next month.

The Dollar Index, which tracks the currency against those of six major trading partners was little changed at 79.634.

Abe in a speech in Tokyo today said he would also carry out a flexible fiscal policy. Taro Aso was named finance chief today. During his 12 months as prime minister through September 2009, the one-time Olympian compiled three extra budgets worth about 20 trillion yen, abandoned a target to balance the budget by March 2012 and distributed a 12,000 yen-per-person cash handout.

BOJ POlicy

An unnamed BOJ board member said that an option would be to “clearly present” in a policy statement that the central bank would continue monetary easing, including asset purchases, “without setting any time frame” until 1 percent inflation is achieved, the minutes showed. The BOJ’s 76 trillion-yen ($890 billion) program that buys securities ranging from government bonds to stock funds will expire at the end of next year.

“A dovish message came through loud and clear,” Gareth Berry and Geoffrey Yu, foreign-exchange strategists at UBS AG, wrote in a research note today about the minutes. “It would appear that the sands are shifting not just in Japan’s political arena, but amongst BOJ policy board members as well.”

Bloomberg News

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