The yen declined against all except one of its 16 major counterparts after a draft document obtained by Bloomberg News showed the government expects the central bank to conduct “bold” monetary easing. Bank of Japan Governor Masaaki Shirakawa said yesterday the BOJ was in close cooperation with the government. The central bank next meets on Jan. 21-22.
Japan’s currency depreciated to 88.41 per dollar on Jan. 4, the weakest level since July 2010.
“Expectations are growing that the BOJ will do something and that is weakening the yen,” said Arne Rasmussen, head of currency research at Danske Bank A/S in Copenhagen. “They may add stimulus at the next meeting.”
The yen will depreciate to 90 per dollar within three months, and may fall more rapidly should the BOJ take action at its meeting, Rasmussen said.
The pound rose for the first time in three days against the dollar after the Bank of England kept its benchmark interest rate at 0.5 percent and left its asset-purchase program at 375 billion pounds ($602 billion).
Sterling gained 0.4 percent to $1.6086.
Australia’s dollar strengthened to the highest level in almost four months versus its U.S. counterpart after data showed imports increased in China, the South Pacific nation’s biggest overseas market.
Shipments to China rose 6 percent last month, the customs administration said in Beijing. Economists surveyed by Bloomberg forecast a gain of 3.5 percent.
“The Chinese data is a whole lot better than anyone expected with both imports and exports accelerating,” said Mike Jones, a currency strategist at Bank of New Zealand in Wellington. “That will only add to recent investor optimism that the Chinese rebound has got legs and should take the Aussie dollar higher.”
The so-called Aussie rose 0.6 percent to $1.0576 after appreciating to $1.0587, the most since Sept. 14. The currency gained 1 percent to 93.30 yen after climbing to 93.44, the highest since August 2008.